When the Fed sells government securities in the open market, the money supply ________ because ________
A) decreases; banks lose liquidity, they make fewer loans and checking account deposits decrease
B) increases; banks gain liquidity, they make more loans and checking account deposits increase
C) increases; banks lose liquidity, they make more loans and checking account deposits increase
D) decreases; banks gain liquidity, they make fewer loans and checking account deposits decrease
E) none of the above
A
You might also like to view...
Refer to Table 7-6. If the actual terms of trade are 1 belt for 1.5 swords and 50 belts are traded, how many swords will Estonia consume?
A) 75 B) 100 C) 125 D) 200
The demand for capital is similar to the demand for labor in that
A) both are inelastic at high prices and elastic at low prices. B) both are derived demands. C) the marginal product of labor is derived from the marginal product of capital. D) the marginal revenue product curve for labor is the same as the marginal revenue product curve for capital.
A recent purchaser of a bond that agrees to pay an annual nominal amount would hope that interest rates do not rise
Indicate whether the statement is true or false
If external costs are included and added to a firm's private costs, then
A) the demand curve will shift to the right. B) the demand curve will shift to the left. C) the supply curve will shift to the right. D) the supply curve will shift to the left.