Economics Mcqs
Q Suppose the central bank purchases a government bond from a person who deposits the entire amount received from the sale in her bank the money supply will ?
  • A A. Rise by an amount that depends on the bank’s reserve ratio
  • B B. Rise by less than the amount of the deposit
  • C C. Fall by exactly the amount of the deposit as long as the bank does not change its reserve ratio
  • D D. Fall by exactly the amount of the deposit as long as the bank does not change its reserve ratio
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