As a result of the Fed's sale of $3,000 worth of government securities to First Main Street Bank, the bank becomes reserve deficient. Suppose that Yvette, a First Main Street Bank's customer, re-pays back the $3,000 loan she took out a few months ago. Which of the following most accurately describes First Main Street Bank's actions? O The bank keeps the $450 as reserves. O The bank creates a $3,000 loan. O The bank keeps the $3,000 as reserves. O The bank creates a $42,000 loan. The money supply in the economy is S
As a result of the Fed's sale of $3,000 worth of government securities to First Main Street Bank, the bank becomes reserve deficient. Suppose that Yvette, a First Main Street Bank's customer, re-pays back the $3,000 loan she took out a few months ago. Which of the following most accurately describes First Main Street Bank's actions? O The bank keeps the $450 as reserves. O The bank creates a $3,000 loan. O The bank keeps the $3,000 as reserves. O The bank creates a $42,000 loan. The money supply in the economy is S
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter11: The Monetary System
Section: Chapter Questions
Problem 9PA
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