Assume the federal government collects $20 billion in taxes and spends them on the public. If the money multiplier is 2.5, bank reserves
A) and the money supply still increase by only $20 billion.
B) increase by $20 billion and the money supply increase by $50 billion.
C) and the money supply both increase by $50 billion.
D) and the money supply are unaffected.
Correct Answer:
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Q45: The five options available to the U.S.
Q46: If the government collects taxes to pay
Q47: Which of the following situations is likely
Q48: When federal government expenditures exceed tax receipts,
Q49: If the government collects taxes and makes
Q51: If the Treasury borrows from the public
Q52: The monetary base will increase if
A) currency
Q53: If the federal government collects $10 billion
Q54: Repos and reverse repos are
A) permanent injections
Q55: If reserves are _ because of a
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