What will the percentage increase in the money supply be

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Reference no: EM13977090

The money supply is $800 billion, the required reserve ratio is one-sixth, and the simple money multiplier applies to any increases in reserves. The government runs a deficit of $150 billion. What will the percentage increase in the money supply be if the Fed monetizes:

a) the deficit?

b) half of the deficit?

c) 10 percent of the deficit?

d) 1 percent of the deficit?

Reference no: EM13977090

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