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If the Fed purchases $50,000 in T-bills from a bank, by how much will the bank's excess reserves increase: a) by $50,000. b) by $50,000 times the required reserve ratio. c) by $50,000 divided by the required reserve ratio. d) Not enough information has been provided to answer the question.

User LIH
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Answer and Explanation:

b) by $50,000 times the required reserve ratio.

User Dpcasady
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