Part 1 (1 point) Assume that banks hold no excess reserves and that all currency is deposited into the banking system. I

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Part 1 1 Point Assume That Banks Hold No Excess Reserves And That All Currency Is Deposited Into The Banking System I 1 (68.69 KiB) Viewed 12 times

Part 1 (1 point) Assume that banks hold no excess reserves and that all currency is deposited into the banking system. If the required reserve ratio is 25.00%, and the Federal Reserve wants to increase the money supply by $75.00 million, the Fed would need to make an open market purchase of $ million. (Insert your answer in millions, and round to two decimal places.) Part 2 (1 point) Assume that banks hold no excess reserves and that all currency is deposited into the banking system. If the required reserve ratio is 5.00%, and the Federal Reserve wants to decrease the money supply by $75.00 million, the Fed would need to make an open market sale of $ million. (Insert your answer in millions, and round to two decimal places.) Part 3 (1 point) Suppose that banks decide to hold excess reserves. In order for the Federal Reserve to change the money supply by the same amounts as in parts 1 and 2, it would need to make t Choose one: OA a smaller open market purchase but a larger open market sale. OB. a smaller open market purchase and a smaller open market sale. OC a larger open market purchase but a smaller open market sale. OD. a larger open market purchase and a larger open market sale.