If the Federal Reserve Unexpectedly Increases the Money Supply, Which

question 178

Multiple Choice

If the Federal Reserve unexpectedly increases the money supply, which of the following will most likely happen in the short run?

• A) real GDP will rise.
• B) real GDP will fall.
• C) real interest rates will rise.
• D) the budget deficit will rise.

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Definitions:

Noncontrolling Interest

The portion of equity in a subsidiary held by investors other than the parent company, representing a minority stake that does not give its holders control over the company.

Intra-entity Purchases

Buying activities of goods or services conducted between departments or divisions within the same entity.

Equity Method

An accounting technique used to assess the profits earned by an investment in another company, recognizing such profits proportional to ownership share.

Intra-entity Purchases

Transactions involving the exchange of goods or services between entities within the same parent company, often leading to consolidation adjustments.