If the Federal Reserve sells $20 million worth of government securities and the M1 multiplier is 2.5. Bank reserves will
A) fall by $20 million.
B) fall by $50 million.
C) fall by $16 million.
D) fall by $8 million.
A
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What type of economic system is commonly described as being controlled by an "invisible hand"?
a. A traditional economy. b. A command economy. c. A market economy. d. A communist economy.
When the Fed _____ bonds, the money supply _____.
A. buys; increases B. buys; decreases C. sells; increases D. sells; is not affected
Which of the following best describes a production function?
A. The relationship between consumer preferences and market demand. B. The relationship between the quantity of labor employed and total cost. C. The relationship between the maximum amounts of output a firm can produce and various quantities of inputs. D. The relationship between price and quantity supplied by sellers in a market.
Historically, the United States has experienced
A. periods of both increases and decreases in the unemployment rate since World War II. B. no changes in the unemployment rate since World War II. C. continuous decreases in the unemployment rate since World War II. D. continuous increases in the unemployment rate since World War II.