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Which of the following statements is MOST true? (a) money supply increases cause bank reserves to increase; (b) the Federal Reserve creates bank reserves through
Which of the following statements is MOST true? (a) money supply increases cause bank reserves to increase; (b) the Federal Reserve creates bank reserves through open market operations; (c) the Federal Reserve expands the money supply of the U.S. mainly by printing new currency (like $100 bills); (d) bank reserves are liabilities of the banks that cannot and do not earn any interest from any source.
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