If the required reserve ratio is 0.05 and the Fed sells a $2,000 bond directly to an individual who pays for it with a check, what will happen to the money supply?
a. The money supply will increase by $2,000.
b. The money supply will decrease by $2,000.
c. The money supply will increase by $100.
d. The money supply will decrease by $100.
e. The money supply will decrease by $200.
B
Economics
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Indicate whether the statement is true or false
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