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Suppose the central bank of Country A were to inject $920 million of reserves into the monetary system by a purchase of bonds held by

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Suppose the central bank of Country A were to inject $920 million of reserves into the monetary system by a purchase of bonds held by commercial banks. If the required reserve ratio is 15.3%, what is the maximum increase in money supply that the new reserves would generate under the following two scenarios? a Assume that commercial banks make all the loans their reserves allow, that firms and individuals keep all their liquid assets in depository accounts, and no money is in the form of currency. (8 marks)

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