If the Money Multiplier Is 2 and the Fed Wants

question 171

Multiple Choice

If the money multiplier is 2 and the Fed wants to increase the money supply by $900,000, it could

• A)buy $300,000 worth of bonds.
• B)buy $450,000 worth of bonds.
• C)sell $300,000 worth of bonds.
• D)sell $450,000 worth of bonds.

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Definitions:

Federal Records

Documents created or received by a government agency that are preserved as evidence of the organization, functions, policies, decisions, procedures, operations, or other activities.

Coefficient Alpha

A reliability coefficient that measures the internal consistency of a test or scale; it is commonly used in psychometrics.

Reliability

The reliability of an evaluation tool in generating steady and unchanging outcomes over various periods.

Spearman-Brown Formula

A mathematical formula that can be used with split-half or odd-even reliability estimates to increase the accuracy, which is impaired because of the shortening (splitting in half) of the test.