When people make deposits of currency into a bank, the quantity of M1
A) changes only if the deposit is an open market operation.
B) immediately decreases by the amount of the deposit.
C) immediately increases by the amount of the deposit.
D) does not immediately change.
E) immediately changes but whether it increases or decreases depends on whether the bank had excess reserves or did not have excess reserves.
D
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List three things that shift the short-run Phillips curve to the right
Average revenue is another way of describing
a. price b. output c. total revenue d. profit e. marginal cost
When the Fed sells government securities to a bank, the securities will be
A) an asset for the bank. B) a liability for the bank. C) both an asset and a liability for the bank. D) neither an asset nor a liability for the bank.
If the Fed's policy reaction function equals r = .02 + p, where r is the real interest rate, p is the inflation rate. When the inflation rate is at the current target of 2%, then the real interest rate will be set at:
A. zero. B. 4% C. 2%. D. 6%.