Transaction eventually increase the money supply

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Suppose the Fed buys 3 treasury bonds from the public. The people who sold these bonds keep all their money in checking accounts. Each bond is worth $1000 (so the Fed has bought $3000 worth of bonds). Suppose further that the required reserve ratio is 0.12. Assuming no money is held as cash and that banks hold no excess reserves, by how much will this transaction eventually increase the money supply? Please show work so I can understand how to do this....

Reference no: EM131104486

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