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24 January, 23:45

If the Federal Reserve sells $40,000 in Treasury bonds to a bank at 5% interest, what is the immediate effect on the money supply?

a. It is decreased by $40,000.

b. It is increased by $42,000.

c. It is decreased by $42,000.

d. It is increased by $40,000.

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Answers (1)
  1. 25 January, 02:30
    0
    The Answer is A, Decreased by $40,000
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