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Suppose the Fed buys T-bills.

As a result of this policy, what will happen to the money supply?

 

Hint


Suppose the Fed increases discount rate.

As a result of this policy, what will happen to the money supply?

 

Hint


Consider the following balance sheet for Capital One.

AssetsLiabilities
Reserves504Deposits2800
Loans2296

Suppose that someone deposited $600 at Capital One.

Given this data, what is the maximum amount by which the money supply will increase?

Hint

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