To reduce the amount of excess reserves in an economy, the central bank of a country can:
a. reduce the interest rate on loans granted by commercial banks to the public
b. pay interest on the reserves that commercial banks have deposited with the central bank.
c. reduce the discount rate.
d. buy government securities from the public.
b
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Refer to Figure 26-7. Suppose the Fed sells Treasury Bills in pursuit of contractionary monetary policy. Using the static AD-AS model in the figure above, this situation would be depicted as a movement from
A) B to C. B) C to B. C) B to D. D) C to D. E) A to B.
Refer to the above figures. A tariff is placed on a foreign good. Which figure represents the situation in the domestic market for the foreign good?
A) Panel A B) Panel B C) Panel C D) Panel D
If the expected rate of return decreases
A. The demand for loanable funds will increase. B. The demand for loanable funds will decrease. C. The time value of money will increase. D. Market participants will save less money.
Major league baseball is exempt from antitrust prosecution by way of the so-called "reserve clause." The elimination of the reserve clause in baseball to encourage players to act as free agents can help
A. reduce the exercise of monopsony power by team owners. B. increase the exercise of monopsony power by team owners. C. increase the profits of team owners. D. reduce the wages paid to baseball players.