Which of the following would reduce the money multiplier?
A. cash drains from banks
B. bond purchases by the Fed
C. reducing the reserve ratio
D. bank reductions in desired reserve holdings
Answer: A
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In response to the financial crisis in 2008, the Fed created which of the following policy tools?
A) quantitative easing B) the required reserve ratio C) the discount rate D) the federal funds rate E) open market operations
The Canadian experience with inflation and unemployment in the early 1990s has this to say about policy rules:
A) A central bank independent of political pressure may thereby not be serving the public's politically-revealed preferences. B) A central bank bowing to political pressure cannot get the inflation rate below the unemployment rate. C) A constant-growth-rate-of-money rule cannot stabilize inflation if unemployment is allowed to vary substantially. D) A constant-growth-rate-of-high-powered-money rule allows too much variation in the growth of the actual money supply to hold down inflation.
Which of the following is NOT a condition that helps enforce a cartel agreement?
A) a small number of firms B) nearly homogeneous products C) easily observable prices D) large variation in input prices
Ceteris paribus is Latin for
A. all is lost. B. equilibrium is optimal. C. holding all other things constant. D. at equilibrium.