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suppose 'the' multiplier is 3, the money multiplier is 6 and the income multiplier with respect to the money supply is 4. The government increases
suppose 'the' multiplier is 3, the money multiplier is 6 and the income multiplier with respect to the money supply is 4. The government increases spending by $12b, but because the economy is operating at full capacity it wants to use monetary policy to offset the impact that will have on income. The bank should
a. buy $1.5b bonds
b. buy $9b bonds
c. sell $1.5b bonds
d. sell $9b bonds
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