Open market sales of bonds by the Federal Reserve drain reserves from the banking system and shift
a. the allocation of wealth between bonds and stocks
b. the economy toward a trough in the business cycle
c. the money supply curve leftward
d. reserves to nonmember banks
e. the demand for money curve leftward
C
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Why do sellers pay all of a tax when supply is perfectly inelastic?
A) because a perfectly inelastic supply means that the demand is elastic B) because the government requires firms to collect the tax C) because a perfectly inelastic supply means that the quantity supplied is quite sensitive to a change in price D) because a perfectly inelastic supply means that suppliers will produce the same amount regardless of the price E) because in this case the price of the good that suppliers receive and keep does not change
How do new Keynesians use menu costs to help explain price stickiness in the short run?
What will be an ideal response?
Which of the following is a statement of positive economics? a. Unemployment is a more severe problem in societies than inflation
b. Our current unemployment rate is a serious problem. c. If the overall unemployment rate is 6 percent, teenage unemployment rates will exceed 12 percent. d. An unemployment rate of 4 percent would be too low.
Policymakers generally are:
A. more concerned about structural deficits than cyclical deficits. B. more concerned about cyclical deficits than structural deficits. C. not concerned about structural or cyclical deficits. D. equally concerned about structural and cyclical deficits.