# In the simple deposit expansion model, a decline in checkable deposits of $500 when the required reserve ratio is equal to 20 percent implies that the Fed In the simple deposit expansion model, a decline in checkable deposits of$500 when the required reserve ratio is equal to 20 percent implies that the Fed

A) sold $250 in government bonds. B) sold$100 in government bonds.
C) sold $50 in government bonds. D) purchased$100 in government bonds.

Answer: The correct answer is sold \$100 in government bonds.