Assume that the M1 multiplier is 3 and the Federal Reserve sells $100 million worth of government securities. Bank reserves will
A) rise by $100 million.
B) fall by $100 million.
C) fall by $300 million.
D) fall by $33.33 million.
B
You might also like to view...
Refer to Table 23-2. Using the table above, compute aggregate expenditure and identify the macroeconomic equilibrium
What will be an ideal response?
Economics can be divided into two main branches of study: a. capitalism and communism
b. capitalism and socialism. c. demand and supply. d. microeconomics and macroeconomics.
Diversification
a. increases the likely fluctuation in a portfolio's return, but reduces market risk. b. increases the likely fluctuation in a portfolio's return, but reduces firm-specific risk.. c. reduces the likely fluctuation in a portfolio's return and reduces market risk. d. reduces the likely fluctuation in a portfolio's return and reduces firm-specific risk.
At the equilibrium real interest rate in the open-economy macroeconomic model
a. saving = domestic investment b. saving = net capital outflow c. net capital outflow = domestic investment d. net capital outflow + domestic investment = saving