If the Money Multiplier Is 2 and the Fed Buys

question 9

Multiple Choice

If the money multiplier is 2 and the Fed buys $50,000 worth of bonds, what happens to the money supply?

• A)it increases by $100,000
• B)it increases by $150,000
• C)it decreases by $100,000
• D)it decreases by $150,000

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