When the Fed buys securities from a bank, what happens to the monetary base and the quantity of money? Which changes by more or do both change by the same amount?
What will be an ideal response?
When the Fed buys securities from a bank, both the monetary base and the quantity of money increase. As reflected by the money multiplier, the increase in the quantity of money exceeds the increase in the monetary base.
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Inflationary tendencies and even hyperinflation in many Latin American countries have been exacerbated by the tendency of governments to
A) tax too heavily. B) regulate too heavily. C) print money to finance policies to stimulate the economy. D) keep out foreign competition. E) use industrial policies to foster growth.
In the following situation, the tax system is Taxable income $1,000 $2,000 $4,000 $8,000 Tax payments $10 $30 $90 $270
a. progressive throughout all levels of income b. progressive between $1,000 and $2,000 of income but regressive above $2,000 c. regressive throughout all levels of income d. regressive between $1,000 and $2,000 of income but progressive above $2,000 e. proportional throughout all levels of income
Elasticity of demand Quantity Price A 4 15 B 12 6
What will be an ideal response?
If you save $20,000 for a down payment on a house, you are using money as
A. a medium of exchange. B. a standard of deferred payment. C. a unit of account. D. a store of value.