1 - California State University, Northridge

Change in Deposits = (1/R)(Change in Reserves) +$20 billion = (20)(Change in Reserves) $1 billion = change in reserves. 8. First, note that an open-market purchase increases reserves by the amount of the purchase. Therefore, a purchase of $10 billion will increase reserves in the banking system by $10 billion. Second, we use the following equation: ................
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