In which of the following economic theories is it possible for an increase in the money supply to lead to a decrease in Real GDP in the short run?

Adam Smith, the father of modern economics wrote in his book, An Inquiry into the Nature and Causes of the Wealth of Nations, "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner but from their regard to

their own interest." Explain what he meant by that statement and how such behavior promotes the wealth of a nation.

Assume a money multiplier of 3. If the Treasury finances a $30 million expenditure by selling securities to the Fed, the effect of this transaction on the money supply is that it will

A) remain unchanged. B) rise by $3 million. C) rise by $30 million. D) rise by $90 million.