Suppose the Fed Increases the Money Supply

question 13

Multiple Choice

Suppose the Fed increases the money supply. As a result of this, people go out and spend more money on consumer goods, increasing aggregate spending. This is known as a(n)

• A) direct effect of monetary policy.
• B) indirect effect of monetary policy.
• C) direct effect of fiscal policy.
• D) indirect effect of fiscal policy.

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Definitions:

PhLi

Phenyllithium, a strong organolithium reagent used in the formation of carbon-carbon bonds in organic synthesis.

NaBH

Likely refers to a sodium borohydride compound, NaBH4, used as a reducing agent in organic chemistry.

MgBr

Likely a shorthand for a magnesium bromide compound, which can act as a Grignard reagent in organic synthesis.

Major Organic Product

The primary product formed in an organic chemical reaction that is favored under the reaction conditions, typically in greater yield compared to side products.