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:

Psychosomatic

Pertaining to physical symptoms that are caused or significantly influenced by emotional factors.

Generalized Anxiety Disorder

A mental health disorder characterized by persistent and excessive worry about various aspects of life, often imagining worst-case scenarios.

Apprehensive

Feeling anxious or fearful about the future or something in particular.

Conversion Disorder

A psychiatric disorder where psychological stress manifests as physical symptoms without a medical cause.