Business, 07.05.2020 07:57, naomicervero

With a required reserve ratio of 20%, explain in detail how an Open Market Purchase of $100,000 from an individual leads to an expansion in the money supply. I would like you to describe (at least) four different "rounds" in this process. By how much does the money supply increase during each round? What is the maximum the money supply can increase from this Open Market Purchase? What can lead to the actual increase being much lower than the above number?

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With a required reserve ratio of 20%, explain in detail how an Open Market Purchase of $100,000 from...