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Monica [59]
2 years ago
12

If the money multiplier is 3 and the Fed wants to increase the money supply by $900,000, it could Group of answer choices

Business
1 answer:
mafiozo [28]2 years ago
6 0

Fed buy $300,000 worth of bonds, if the money multiplier is 3 and want to increase the money supply by $900,000. As the formula of the money multiplier is change in total money supply upon change in total monetary base.

<h3>What is money multiplier?</h3>

The multiplier effect is a term used in economics to describe the proportional increase or decrease in final revenue that occurs as a result of a capital injection or withdrawal.

In effect, it calculates the influence of a change in economic activity, such as investment or spending, on a company's total economic output.

Thus, Fed buys $300,000 worth of bonds.

For further details about the money multiplier, click here:

brainly.com/question/23860968

#SPJ1

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