Suppose that the Federal Reserve ("the Fed") buys $10,000 of U. S. government bonds and the required reserve ratio is 0.15. If the assumptions of the simple money multiplier hold, this will the money supply by . Which of the following assumptions is necessary for the simple money multiplier to be applicable? a. Borrower default rates are stable.
b. Borrowers do something with the money.
c. People's marginal propensity to consume does not rise with income.