During a period of inflation, the Fed is likely to:
a. sell government securities to banks in order to reduce the amount of loanable funds.
b. buy government securities from banks in order to reduce the amount of loanable funds.
c. raise taxes in order to reduce the money supply.
d. cut the required reserve ratio in order to reduce the amount of excess reserves banks have to loan out.
e. cut the discount rate in order to increase the affordability of loanable funds.
a
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Which statement CORRRECTLY describes "structural unemployment"?
A) Structural unemployment occurs mainly during recessions. B) Structural unemployment is also called "frictional unemployment." C) Structural unemployment occurs even when the economy is at the natural unemployment rate. D) The amount of structural unemployment depends on normal labor turnover.
The coordination failure model is based on the possibility of increasing returns to scale
A) both at the aggregate level and at the level of the individual firm. B) at the aggregate level, but not at the level of the individual firm. C) at the level of the individual firm, but not at the aggregate level. D) in future periods, but not in the current period.
The circular flow model is all of the following except
a. an abstraction from reality b. a model of two markets c. a model of two agents d. a simple economic model e. designed to aid policy makers
As the supply curve becomes steeper, the proportion of a sales tax paid by the seller
A. gets closer to zero. B. stays the same. C. increases. D. decreases.