If the Federal Reserve wanted to change the money supply in the economy, it would be least likely to:
A. buy bonds on the open market.
B. sell bonds on the open market.
C. change the level of reserves required to be held by banks.
D. change the federal funds rate.
Answer: C
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"Economists have generally come to agree that monetary policy is better suited than fiscal policy for controlling GDP" because
A) money is neutral and therefore changes affect real income but not prices. B) fiscal spending and tax changes affect the economy less than changes in the money supply. C) the Fed can make decisions quickly, Congress and the President more slowly. D) Congress can make decisions quickly, the Fed more slowly.
When a nation's real per capita Gross Domestic Product (GDP) increases, which of the following is TRUE?
A) Every individual in that nation shares in the economic gain. B) A nation must channel most of the economic gains to its poorest citizens. C) Low income people are guaranteed to lose; they never share in their nation's economic gains. D) We don't know who has most benefited from economic growth unless we look at the distribution of income.
Which of the following is true of the shape of the short-run Phillips curve? a. It is vertical
b. It is horizontal. c. It is downward sloping. d. It is upward sloping.
An example of a quantity restriction is
A. an import quota. B. rent controls. C. price supports in agriculture. D. the minimum wage.