Suppose banks decide to hold more excess reserves relative to deposits. Other things the same, this action will cause the
a. money supply to fall. To reduce the impact of this the Fed could sell Treasury bonds.
b. money supply to fall. To reduce the impact of this the Fed could buy Treasury bonds.
c. money supply to rise. To reduce the impact of this the Fed could sell Treasury bonds.
d. money supply to rise. To reduce the impact of this the Fed could buy Treasury bonds.
b
You might also like to view...
Which of the following is a predictable side effect of increased government activity (for example, taxes and subsidies) designed to redistribute income among citizens?
a. improvement in the operational efficiency of government agencies b. rapid economic growth c. a reduction in the amount of lobbying d. an increase in rent-seeking activity
The time that elapses between the beginning of a recession or an inflationary episode and the identification of the macroeconomic problem is referred to as a(n)
A. legislative lag. B. implementation lag. C. recognition lag. D. budget lag.
Refer to Figure 8.5. The total fixed costs for Ollie's Ovens are A) $0. B) $250. C) $300. D) indeterminate from this information.
When the Federal government uses taxation and spending actions to stimulate the economy it is conducting:
a. Employment policy b. Monetary policy c. Fiscal policy d. Incomes policy