If the Monetary Base Equals $400 Billion and the Money

question 118

Multiple Choice

If the monetary base equals $400 billion and the money multiplier equals 2, then the money supply equals:

• A) $200 billion.
• B) $400 billion.
• C) $800 billion.
• D) $1,000 billion.

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Definitions:

Federalist Papers

A series of 85 essays written by Alexander Hamilton, James Madison, and John Jay promoting the ratification of the United States Constitution.

James Madison

The fourth President of the United States, serving from 1809 to 1817, and is considered one of the Founding Fathers of the country.

Alexander Hamilton

A Founding Father of the United States, known for his contributions as an economist, political philosopher, and as the first Secretary of the Treasury.

Thomas Jefferson

An American Founding Father, the principal author of the Declaration of Independence, and the third President of the United States, serving from 1801 to 1809.