(Solution)-If the central bank prints more $10 bills and spends

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27. If the central bank prints more $10 bills and spends them, then as a direct result of this action 48a) M1 and M2 both increase b) neither M1 nor M2 increasec) M1 increases but M2 does not d) M2 increases but M1 does not28. A sale of government bonds by the central bank should causea) bond prices to rise b) an increase in the supply of moneyc) an increase in chartered banks loansd) a decrease in reserves of the banking system29. The money multiplier tells us the ultimate increase ina) the income level due to an increase in the money baseb) the money supply due to an increase in the money base.c) the money supply due to an increase in the income leveld) the income level due to an increase in the money supply

 

Solution ID:10086537 | Question answered on 16-Oct-2016

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