How much money will be created in the banking system

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Reference no: EM13997428

Suppose the Fed purchases $1,000 worth of Treasury bonds. Suppose also that the required reserve ratio is 10%. How much money will be created in the banking system?

Exactly $1,000

Less than $1,000 for sure

At most $1,000

More than $1,000.

Reference no: EM13997428

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