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Given a deposit expansion model in which the required reserve ratio is 12.5%, a $100,000 purchase of government securities by the Federal Reserve will result in a maximum increase (decrease) in the money supply of

A. $87,500

B. $12,500

C. $87,500

D. $800,000

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M948759

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