We Would Expect Which of the Following to Occur When

question 54

Multiple Choice

We would expect which of the following to occur when the central bank conducts an open market sale of bonds?

• A) An increase in the money multiplier.
• B) An increase in the monetary base.
• C) A decrease in the monetary base.
• D) An increase in high- powered money.
• E) A decrease in the money multiplier.

---

Definitions:

Net Change

Net Change refers to the difference in a financial instrument's closing price between two consecutive trading sessions.

Cash Flows

The total amount of money being transferred into and out of a business, especially as affecting liquidity.

Income Recognition

The accounting principle that revenue should only be recognized after the business has fulfilled its obligations and the payment is certain.

Direct Method

A method for creating a cash flow statement where actual cash flow information from operations is used rather than adjustments to net income.