SITUATION FEDERAL RESERVI EXPANDING THE MONEY SUPPLY, Seppose the Federal Reserve decides that it wants to expand the money supply (M1) by 500 billion dollars, and they decide to use open market operations to accoinplish their goat. Assume that there is no reserve requirement on checking accounts and that the actual money multiplier for M1 is 5 , and expected tostay at 5 . Refer to the situation ahove. What might happen to the economy in the longrun? the economy would be stimutated the econorty would be contracted prices would increase the monetary base would remain constant none of the above