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Suppose the size of the OMO you described in part (b) was $100 Million, the reserve requirement is 10%, banks are holding 10% in excess
Suppose the size of the OMO you described in part (b) was $100 Million, the reserve requirement is 10%, banks are holding 10% in excess reserves, and there is no change in cash held by the public in response to the Fed action. By how much will the money supply change as a result of this OMO? Show your calculations
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