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If the Fed buys $1,000 of government bonds, does this mean that money supply will increase by $1,000? Choose one answer. No, because of the
If the Fed buys $1,000 of government bonds, does this mean that money supply will increase by $1,000? Choose one answer.
- No, because of the multiplicative effect that buying government bonds has in the economy.
- No, less than $1,000 will be the money supply increase.
- None of the above.
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