Suppose the fed sells $100 of government securities. if the desired reserve ratio is 20 percent and there is no currency drain

Question

LenKa [72]

2 years ago

6

Suppose the fed sells $100 of government securities. if the desired reserve ratio is 20 percent and there is no currency drain

, then the quantity of money

Business

1 answer:

Julli [10] · Answer 1 · 2022-02-24T10:23:30+03:00

The reserve ratio is the part of a depositor ’s balances that banks must have on hand as cash.

This is a requirement determined by Federal Reserve and this affects the money supply in a country at any given time.

<span>If the desired reserve ratio is 20%, and the FED sold $100 of government and there is no currency drain, then the quantity or supply of money will decrease. </span>

Suppose the fed sells​ $100 of government securities. if the desired reserve ratio is 20 percent and there is no currency​ drain

Suppose the fed sells $100 of government securities. if the desired reserve ratio is 20 percent and there is no currency drain