The interest rate is the price borrowers pay to borrow money. Key interest rates are controlled by the Federal Reserve System. If the Federal Reserve acts to reduce interest rates, economists would expect the quantity of money supplied to
A. increase.
B. decrease.
C. not change.
D. Uncertain-economic theory has no answer to this question.
Answer: B
You might also like to view...
If rising costs have compelled an increase in the price of football tickets for next season, you could safely assume the college athletic director
A) doesn't know the difference between sunk costs and marginal costs. B) doesn't want fans to become angry or resentful about the price increase. C) isn't setting prices to maximize net revenue. D) really has not raised prices. E) would prefer not to raise prices but has no choice in the matter.
When the United States sends money to Indonesia to help tsunami survivors, in what account is this transaction recorded?
A) the current account B) the capital account C) the financial account D) the foreign exchange account
Which of the following is not included in Nation A's financial account?
a. Nation A's interest earnings from foreign operations. b. Greenfield investments made by foreigners in Nation A. c. Foreign purchases of Nation A's Treasury bills. d. All the above are included.
Each of the following is a provision of the 1996 welfare reform law except that
A. lifetime welfare benefits would be limited to five years. B. each state receives a lump sum to run its own welfare and work programs. C. any adult found guilty of a felony would be removed from the welfare rolls. D. future legal immigrants are banned from welfare assistance.