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The COVID-19 pandemic has encouraged the Federal Reserve to perform conventional monetary policy actions in order to stimulate the economy. Assuming the Fed purchases RM300
The COVID-19 pandemic has encouraged the Federal Reserve to perform conventional monetary policy actions in order to stimulate the economy. Assuming the Fed purchases RM300 million worth of bonds from a bank that previously had no excess reserves, how much can deposits in the banking system increase by if the required reserve ratio was 10%? Is it a good approach to increase reserve requirement ratio during the financial crisis?
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