Answer:
$95 million
Explanation:
When the Feds buys securities, it is an expansionary monetary policy
Expansionary monetary policy : these are polices taken in order to increase money supply. When money supply increases, aggregate demand increases. reducing interest rate and open market purchase are ways of carrying out expansionary monetary policy
Required reserves is the percentage of deposits required of banks to keep as reserves by the central bank
Required reserves = reserve requirement x deposits
Excess reserves is the extra that it kept by banks
Money supply = deposit / total reserves
total reserves = 30 + 10 = 40%
total increase in money supply = $38 / 0.4 = $95 million
