By buying bonds, the Fed decreases the quantity of reserves in the banking system and decreases the money supply.
a. true
b. false
b. false
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Economics is a science that: a. typically uses controlled experiments to learn about consumer and firm behavior
b. uses models that cannot be tested empirically due to the complex nature of the economy. c. explores how choices are made between conflicting wants and desires in a world of scarcity. d. relies entirely upon normative analysis.
Assume that supply decreases slightly and demand decreases greatly. Which of the following will happen?
a. Equilibrium price will fall and equilibrium quantity will rise. b. Equilibrium price will rise and equilibrium quantity will fall. c. Equilibrium price will rise and equilibrium quantity will rise. d. Equilibrium price will fall and equilibrium quantity will fall. e. Neither equilibrium price nor equilibrium quantity will change.
Which one of the following is a final good or service?
A. Chemical pesticides used by a farmer to control the incidence of crop disease
B. Microcomputer chips for a new computer
C. A radio bought by General Motors for use in its new line of cars
D. A will drawn up by your personal attorney
In considering the holding period return, the longer the term of the bond the:
A. less important is the coupon rate and the more important is the current yield. B. less important is the capital gain. C. more important is the capital gain. D. less important is the capital gain and the more important in the current yield.