The four main tools of monetary policy are:
A. tax rate changes, the discount rate, open-market operations, and the federal funds rate.
B. tax rate changes, changes in government expenditures, open-market operations, and
interest on reserves.
C. the discount rate, the reserve ratio, interest on reserves, and open-market operations.
D. changes in government expenditures, the reserve ratio, the federal funds rate, and the
discount rate.
C. the discount rate, the reserve ratio, interest on reserves, and open-market operations.
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The slope of a curved line differs from that of a straight line in that
A. the numerical value of the slope of a straight line is different at every point but is the same at every point for a curved line. B. the numerical value of the slope of a straight line is always higher than the numerical value of the slope of a curved line. C. the numerical value of the slope of a curved line is different at every point but is the same at every point for a straight line. D. the numerical value of the slope of a curved line is an irrational number, but the numerical value of the slope of a straight line is always a rational number. E. straight lines are more realistic, but curved lines are not descriptively accurate for the real world.
The aggregate price level is likely to rise if ________
A) the long-run real interest rate rises B) the long-run nominal interest rate rises C) the stock of money grows faster than real GDP D) real GDP grows faster than the stock of money
Suppose you found $10,000 hidden under a rock and deposited it in a demand deposit account at your bank. If the reserve requirement was 10 percent, your deposit would initially add ____ to total demand deposits and over time increase the money supply by a maximum of ____
a. $10,000; $100,000 b. $10,000; $90,000 c. $1,000; $90,000 d. $1,000; $9,000
The problem in many middle- and low-income economies around the world is very high __________, which generally arises from huge budget deficits that are financed by the government printing its domestic currency.
a. inflation b. unemployment c. taxes d. leverage