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

---

Definitions:

Functional Strategy

A specific approach taken by a department or unit within an organization to achieve its goals and contribute to the overall business strategy.

Operating Strategy

A plan that outlines how a business will use its resources to achieve its objectives and maintain competitive advantage.

Corporate Strategy

An overall, long-term plan of action designed to achieve the core objectives and overarching goals of an entire organization.

Strategic Business Unit

A semi-autonomous unit within an organization that focuses on a specific market or product line, often with its own strategic direction.