# Suppose the central bank purchases a government bond from a person who deposits the entire amount received from the sale in her bank the money supply will ? with Answer - Economics Mcqs | TestPrep

> Solved MCQ: Suppose the central bank purchases a government bond from a person who deposits the entire amount received from the sale in her bank the money supply will ? Correct Answer: A. rise by an amount that depends on the bank’s reserve ratio. Verified answer explanation for FPSC, PPSC, MDCAT, NTS, and CSS competitive exam preparation.

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# Suppose the central bank purchases a government bond from a person who deposits the entire amount received from the sale in her bank the money supply will ?

Direct Answer & Quick Reference

The correct option is **A. rise by an amount that depends on the bank’s reserve ratio**.

A. rise by an amount that depends on the bank’s reserve ratio **(Correct Answer)**

B. rise by less than the amount of the deposit

C. fall by exactly the amount of the deposit as long as the bank does not change its reserve ratio

D. fall by exactly the amount of the deposit as long as the bank does not change its reserve ratio

E. be unchanged

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Verified Key: A. rise by an amount that depends on the bank’s reserve ratio
Solved by 1,533+ students

Verified against official examination board answer keys and standard curriculum textbooks.

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