Implicit costs will be zero in the long run

If the Fed buys $5 million in government bonds, how much will the money supply change?

a. It will increase by $5 million. b. It will increase by more than $5 million. c. It will decrease by $5 million. d. It will decrease by more than $5 million.

Government borrowing:

A. is the primary means of financing public expenditures. B. provides a stimulus to government spending with no opportunity cost. C. may crowd out private sector investment. D. is prohibited by the U.S. constitution.