Refer to Scenario 1. Once the full impact of the Fed's open market purchase and Sheila's deposit worked its way through the banking system, what is the maximum change on the money supply as a result of these two events?
A) Money supply falls by $100,000.
B) Money supply falls by $1,000,000.
C) Money supply rises by $10,000.
D) Money supply rises by $1,000,000.
Ans: D) Money supply rises by $1,000,000.
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