If the FR Bank sells ____ worth of securities in the open market to a commercial bank, then reserves ____. $100; increase by $1,000 $300; decrease by $3,000 $300; decrease by $300 $100; increase by $100
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When the commercial bank purchases these securities, it pays the FR Bank with its reserves. So, the reserves of the commercial bank decrease by the amount it paid for the securities. Show more…
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