If the money multiplier is 2.4 and the Fed buys $8 million in securities on the open market, transaction deposits could potentially
A) decrease by $16.5 million. B) increase by $8 million.
C) decrease by $19.2 million. D) increase by $19.2 million.
D
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An increase in the money supply will raise equilibrium GDP if the
A) IS curve is not vertical. B) IS curve is negatively sloped. C) position of the IS curve depends on the level of real money balances. D) position of the LM curve depends on the level of real money balances.
Refer to the above figures. A unit tax of $2 has been levied on a good. Which of the panels depict the effect of the taxes?
A) Panel 1 B) Panel 2 C) Panel 3 D) None of the diagrams reflect the effect of the tax.
What was the rate of growth of real GDP from 1960 to 2010?
a. 19% b. 81% c. 110% d. 376%
Which of the following options would the Fed pursue if it wanted to increase the supply of money in the economy?
a. lowering reserve requirements b. raising the discount rate c. selling bonds d. increasing the interest rate paid on reserves