Explain how the money supply will expand more

Reference no: EM13237435

Assume that the reserve requirements is 5 percent. All other things equal, will the money supply expand more if the Federal Reserve buys $2,000 worth of bonds or if someone deposits in a bank $2,000 that he had been hiding in his cookie jar? If one creates more, how much more does it create?

Reference no: EM13237435

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