Suppose the federal reserve increased deposits

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Suppose the Federal Reserve increased deposits by $100 billion, but the reserve requirement on all deposits was 100%. What impact would the change in deposits have on the money supply?

Select one:

a. The money supply would increase by $100 billion.

b. The money supply would increase by an infinite amount.

c. The money supply would decrease by $100 billion.

d. The money supply would decrease by an infinite amount.

e. The money supply would not change.

Reference no: EM13727389

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