In the simple deposit expansion model, if the required reserve ratio is 20 percent and the Fed increases reserves by $100, checkable deposits can potentially expand by

When the Fed buys government securities

A) reserves increase, leading to a decrease in the money supply by an amount more than the purchase of the government securities. B) reserves increase, leading to a increase in the money supply by an amount more than the purchase of the government securities. C) reserves decrease, leading to a increase in the money supply by an amount more than the purchase of the government securities. D) reserves decrease, leading to a decrease in the money supply by an amount more than the purchase of the government securities.

The United States is an example of a mixed economy

a. True b. False Indicate whether the statement is true or false