When the Fed buys a $10,000 bond from a bond dealer
A) reserves of the banking system remain unchanged, but the money supply increases by $10,000.
B) reserves of the banking system increase by $10,000, but the money supply will only be able to increase by something less than this amount.
C) reserves of the banking system increase by $10,000, but the money supply can increase by more than $10,000.
D) reserves of the banking system remain unchanged, but the money supply decreases by $10,000.
C
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Price decreases always increase economic efficiency.
Answer the following statement true (T) or false (F)
In monopolistically competitive market structure, because each good sold in the market is ____, each firm is considered a ____
a. slightly different; price maker b. slightly different; price taker c. the same; price maker d. the same; price taker
When economists talk about "optimal outcomes" in the marketplace, they mean that
A. The allocation of resources by the market is likely to be the best possible, given scarce resources and income constraints. B. The allocation of resources by the market is perfect. C. All the consumer desires are satisfied and business profits are maximized. D. Everyone who wants a good or service can have it.
Does a firm's decision to spend money on celebrity endorsers signal about the quality of their product?
What will be an ideal response?