Part 1)The Federal Reserve buys $16.00 million in Treasury securities. If the required reserve ratio is 10.00%, and all currency is deposited into the banking system, and banks hold excess reserves of 10%, then the maximum amount the money supply can increase is $ million. (Insert your answer in millions; if you think the answer is $30 million, just enter 30. Round your answer to two decimal places.)
Part 2) The Federal Reserve sells $34.00 million in Treasury securities. If the required reserve ratio is 10.00%, and all currency is deposited into the banking system, and banks hold excess reserves of 10%, then the maximum amount the money supply can decrease is $ million. (Insert your answer in millions, and round your answer to two decimal places.)
Part 3) Assume that banks hold no excess reserves and that all currency is deposited into the banking system. If the required reserve ratio is 20.00%, and the Federal Reserve wants to decrease the money supply by $25.00 million, the Fed would need to make an open market sale of $ million(Insert your answer in millions, and round to two decimal places.)
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Part 1)The Federal Reserve buys $16.00 million in Treasury securities. If the required reserve ratio...
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