When the fed adds new reserves to the system

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When the Fed adds new reserves to the system, some of these new reserves find their way out of the country into foreign banks or foreign investment funds. In addition, some portion of these new reserves ends up in people's pockets and mattresses instead of bank vaults. These "leakages" reduce the money multiplier and sometimes make it difficult for the ages to control the money supply precisely. Explain why this is true.

Reference no: EM131112479

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