This can be expressed as B = C + R
when bank reserves R increase, the monetary base B increases.
Saturday, February 25, 2012
Open Market Purchase Operations
An open market purchase raises the monetary base= B,because the monetary base is the sum of currency in circulation= C and bank reserves = R
This can be expressed as B = C + R
when bank reserves R increase, the monetary base B increases.
This can be expressed as B = C + R
when bank reserves R increase, the monetary base B increases.
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