Author Question: If the Fed sells 100 million of U.S. government securities, what happens to the quantity of money? ... (Read 66 times)

luvbio · **on:** Jun 29, 2018

If the Fed sells 100 million of U.S. government securities, what happens to the quantity of money?

What will be an ideal response?

Question 2

The table above gives production information for Bob's Baseball Cap Company. Bob's total cost when zero caps are produced is 200 and workers cost 10 per hour. The average fixed cost of producing 25 baseball hats per hour is

A) 1.60
B) 8.00.
C) 9.60.
D) More information is needed to answer the question.

nital · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

If the Fed sells 100 million of U.S. government securities, the monetary base decreases and, along with it, the quantity of money decreases. The money multiplier shows that the quantity of money decreases by more than 100 million.

Answer to Question 2

B