The result would be a(n) $200,000 expansion of the money supply
The money supply in macroeconomics refers to the total volume of currency held by the public at a given point in time. There are several ways to define "money," but the most common are currency in circulation and demand deposits.
The Fed can increase the money supply by lowering bank reserve requirements, allowing banks to lend more money. In contrast, by increasing bank reserve requirements, the Fed can reduce the size of the money supply.
Our country's current monetary policy is expansionary, which means that the money supply is artificially increased and interest rates are near zero. As a result, the growth rate of all dollars in circulation ("M2 Money Supply") reached a new high of 27% in 2020-2021.
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