Which of the Following Increases the Quantity of Money

question 133

Multiple Choice

Which of the following increases the quantity of money?

• A) an individual's cash withdrawal from a bank
• B) an individual's purchase of a government security from the Fed
• C) the Fed's purchase of a government security
• D) an increase in the government's budget deficit

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Definitions:

FICA Tax

Federal Insurance Contributions Act tax, a mandatory payroll deduction in the United States funding Social Security and Medicare benefits.

State Unemployment Tax

A tax levied by state governments on businesses to fund unemployment insurance benefits for workers who have lost their jobs.

Employee Withholding

The portion of an employee's wages deducted by the employer for taxes, social security, and other benefits, and paid directly to the government.