Other things being equal, when the Fed buys U.S. government securities
A) the quantity of paper currency and coins in circulation expands by more than the amount of the Fed's purchase.
B) the Fed's total assets and total liabilities immediately expand by exactly the amount of the Fed's purchase.
C) the U.S. Treasury must immediately issue new securities to replace the securities that the Fed has removed from the market.
D) the quantity of deposits in the U.S. banking system expands by less than the amount of the Fed's purchase.
B
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The demand for cars in a certain country is given by: D = 20,000 - P, where P is the price of a car. Supply by domestic car producers is: S = 5,000 + 0.5P.If this economy is open to trade, and the world price of a car is $6,000, the domestic quantity demanded will be ________ and quantity supplied will be ________.
A. 14,000; 8,000 B. 12,000; 10,000 C. 12,000; 8,000 D. 8,000; 14,000
Lizzie's budget line is shown in the figure above. If the price of a magazine falls, the budget line
A) shifts rightward and its slope does not change. B) shifts leftward and its slope does not change. C) becomes flatter. D) becomes steeper.
The relationship between money growth rates and inflation between 1982 and 2010 helps explain why, by the 1990s, most economists had
A. adopted the monetarist explanation of inflation. B. adopted a rules-only approach to monetary policy. C. become more convinced of the monetary causes of inflation. D. abandoned monetarism as the primary explanation of inflation.
According to dynamic tax analysis, will continuing to push up the tax lead to steady increases in tax revenues? Why?
What will be an ideal response?