If the required reserve ratio is 10 percent and the Fed buys a 5,000 security from a depository institution, the money supply:
a. increases by 15,000.
b. increases by 5,000.
c. decreases by 5,000.
d. increases by 50,000.
e. decreases by 50,000.
Question 2
The aggregate expenditure line shows total planned spending at each _____.
a. consumption level
b. investment level
c. income level, holding the price level constant
d. price level, holding the level of income constant
e. interest rate, holding the price level constant
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