Answer Happy

Assume that banks hold no excess reserves and that all currency
is deposited into the banking system. If the required reserve ratio
is 10.00%, and the Federal Reserve wants to increase the money
supply by $60.00 million, the Fed would need to make an open
market purchase of $
million. (Insert your answer in millions, and round to two
decimal places.)
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 $70.00 million, the Fed would need to make an open
market sale of $
million. (Insert your answer in millions, and round to two
decimal places.)
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
Choose one:
A. a smaller open market purchase but a larger open market
sale.
B. a larger open market purchase but a smaller open market
sale.
C. a larger open market purchase and a larger open market
sale.
D. a smaller open market purchase and a smaller open market
sale.