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Suppose the Fed buys $10 million of U.S. securities from the public. Assume a reserve requirement of 5 percent and that all banks hold no

Suppose the Fed buys $10 million of U.S. securities from the public. Assume a reserve requirement of 5 percent and that all banks hold no excess reserves. The total impact of this action on the money supply will be a. an increase of

$200 million. b. a decrease of $200 million. c. a decrease of $10 million. d. an increase of $10 million.

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