What is the maximum increase in the money supply

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Suppose the federal reserve's trading deal buys $500,000 in T-bills from a securities dealer who then deposits the fed's check in best national bank. Use a balance sheet to show the impact on the bank's loans. Consider the money multiplier and assume that the requires reserve ratio is 10 percent. What is the maximum increase in the money supply that can result from this open market system?

Reference no: EM13238136

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