If the Fed sells government securities to a member of the nonbank public, then the resulting effect on the quantity of money is
A) that there is no change in the quantity of money.
B) much larger than if the securities were sold to a bank.
C) much smaller than if the securities were sold to a bank.
D) the same as if the securities were sold to a bank.
E) None of the above answers is correct.
D
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The four categories of final users of GDP are:
A. businesses, firms, governments, and the foreign sector. B. households, firms, governments, and the foreign sector. C. businesses, corporations, firms, and farms. D. households, the Federal Reserve, governments, and the foreign sector.
Given the budget line in the above figure, which of the following combinations of pizza and milk are affordable?
A) 0 pizzas, 12 gallons of milk B) 2 pizzas, 2 gallons of milk C) 4 pizzas, 4 gallons of milk D) All of the above combinations are affordable.
An increase in the real interest rate would cause an increase in the real demand for money
A) no matter what the change in expected inflation. B) if expected inflation fell by less than the rise in the real interest rate. C) if expected inflation fell by the same amount as the rise in the real interest rate. D) if expected inflation fell by more than the rise in the real interest rate.
Real business cycle theory emphasizes the effect of ________ on economic performance
A) government spending B) the money supply C) aggregate supply shocks D) tax rates