Suppose the nation's Central Bank (CB) decides to engineer an increase in the nation's money supply, and begins the process with an open market operation (OMO), in which the CB purchases 2000+ worth of Treasury securities from Household j (HH). HHJ deposits the entire 2,000? in cash into a demand deposit account at Bank A. The CB has set the reserve requirement ratio (ra) at 40%. The maximum possible deposit expansion that results from the initial increase in total bank reserves of 2,000 ? in cash, is equal to: A) 1,000 ? OB) 4,000 $ $ 35 ? 38 g 2,000 ? D) 5,000 ? E) 3,000 ?

Suppose the nation's Central Bank (CB) decides to engineer an increase in the nation's money supply, and begins the process with an open market operation (OMO), in which the CB purchases 2000 worth of Treasury securities from Household j (HH j). HH j deposits the entire 2,000 in cash into a demand deposit account at Bank A. The CB has set the reserve requirement ratio (r) at 40%. The maximum possible deposit expansion that results from the initial increase in total bank reserves of 2,000 in cash, is equal to: A) 1,000 B) 4,000 c) 2,000 D) 5,000 E) 3,000