If the Money Multiplier Is 3 and the Fed Buys

question 46

Multiple Choice

If the money multiplier is 3 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 $200,000

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Definitions:

Insertion

An anatomical term referring to the point or mode of attachment of a skeletal muscle to the bone or other body part it moves.

Prime Mover

The primary muscle responsible for initiating a specific movement while others assist or stabilize.

Attachment

The process of forming emotional bonds between individuals, particularly in the context of infant-caretaker relationships.

Aponeurosis

An aponeurosis is a flat and broad tendinous sheet or ribbon-like fibrous tissue that connects a muscle to the part it moves or to another muscle.