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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 sells T-bills.

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

 

Hint


Consider the following balance sheet for Wells Fargo.

AssetsLiabilities
Reserves841Deposits2900
Loans2059

Suppose that someone deposited $400 at Wells Fargo.

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

Hint