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    Principles of Money Banking
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    Exam 19: The Instruments of Central Bankin
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    Assume That the M1 Multiplier Is 4
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Assume That the M1 Multiplier Is 4

Question 45

Question 45

Multiple Choice

Assume that the M1 multiplier is 4. If the Federal Reserve purchases $200 worth of government securities, the money supply will


A) rise by $200.
B) rise by $800.
C) fall by $200.
D) fall by $800.

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