Business, 22.07.2020 01:01 tobyclyde

Suppose that the Federal Reserve ("the Fed") buys $5,000 of U. S. government bonds and the required reserve ratio is 0.10. If the assumptions of the simple money multiplier hold, this will the money supply by Which of the following assumptions is necessary for the simple money multiplier to be applicable?
1. The amount of cash people want to hold doesn't change when the money supply changes.
2. People's marginal propensity to consume does not rise with income.
3. Borrower default rates are stable.

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Suppose that the Federal Reserve ("the Fed") buys $5,000 of U. S. government bonds and the required...