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If the Federal Reserve sells $50,000 in treeasury bonds to a bank at 6% what is the immidiate effect on the money supply

2 Answers

1 vote
$2400.00 of interest charge of 50000
answered
User Blocks
by
8.6k points
2 votes
It is increased by $60,000. The immediate effect on the money supply is that it will increase banks' excess reserves which they may lend out.
answered
User George Botros
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8.2k points

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