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The Federal Reserve purchases $10 million in U.S Treasury bonds from a bond dealer, and the dealer’s bank credits the dealers account. The needed reserve ratio is 16 percent, and the bank typically lends any excess reserves immediately. Assuming that no currency leakage occurs, compute how much will the bank be able to lend to its consumers following the Feds purchase $______million. (Enter your response rounded to two decimal places)

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91225720

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