Which of the following statements is FALSE?
A. A reduction in the required reserve ratio increases the money supply and pushes down the equilibrium interest rate.
B. Both monetary and interest rate targets cannot be pursued simultaneously.
C. An open market sale decreases the money supply and pushes up the equilibrium interest rate.
D. An open market purchase reduces the money supply and pushes down the equilibrium interest rate.
Answer: D
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Quantitative easing is likely to lead to a(n) ________
A) increase in unemployment rate B) decrease in the price level C) increase in the federal funds rate D) decrease in the federal funds rate
Many countries dropped their use of money-growth targets in the 1980s because
A) they were in severe recessions. B) political opponents claimed money-growth targeting helped the rich at the expense of the poor. C) money demand became unstable. D) it was too difficult to coordinate monetary policy with fiscal policy.
The primary tool used by the Federal Reserve to change the money supply is _____
Fill in the blank(s) with correct word
Peanut butter and jelly are complements. A decrease in the price of one will result in
A. An increase in the quantity demanded of the other. B. A decrease in the quantity demanded of the other. C. An increase in the demand for the other. D. A decrease in the demand for the other.