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Suppose the Fed decreases discount rate.

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

 

Hint


Suppose the Fed increses required reserve ratio.

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

 

Hint


Consider the following balance sheet for Citi.

AssetsLiabilities
Reserves468Deposits2600
Loans2132

Suppose that someone deposited $700 at Citi.

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

Hint