Answer the next question on the basis of the following consolidated balance sheet of the...
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Finance
Answer the next question on the basis of the following consolidated balance sheet of the commercial banking system. Assume that the reserve requirement is 10%. All figures are in billions Liabilities & Net Worth (billions of Assets (billions of dollars) dollars) Reserves $60Checkable deposits $600 Securities 140 Stock shares 260 Loans 260 Property 400 Suppose the Fed wants to increase the money supply by $400 billion to drive down interest rates and stimulate the economy. Assuming that the money multiplier is operating to full effect, to accomplish the desired increase, the Fed could OA) buy $20 billion of U.S. securities from the banks OB) sell $20 billion of U.S. securities to the banks OC) buy $40 billion of U.S. securities from the banks OD) sell $40 billion of U.S. securities to the banks
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