Which of the following would shift the saving schedule upward?
A. Consumer expectations of rising prices of products.
B. Increased optimism about future incomes.
C. A decrease in real interest rates.
D. A decrease in wealth.
Answer: D
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Suppose that the Federal Reserve issued bonds in the amount of $45 million and the reserve requirement was 10%, what would be the resulting change to the money stock?
A) $45 million B) $450 million C) $4.5 million D) The bond issuance would not impact the money stock only the monetary base.
At the point where the demand and supply curves for a product intersect:
A. the selling price and the buying price need not be equal. B. the market may, or may not, be in equilibrium. C. either a shortage or a surplus of the product might exist, depending on the degree of competition. D. the quantity that consumers want to purchase and the amount producers choose to sell are the same.
To reduce the federal funds rate, the Fed can:
A. buy government bonds from the public. B. increase the discount rate. C. increase the prime interest rate. D. sell government bonds to commercial banks.
Government purchases include government spending on:
A. government consumption goods and public capital goods. B. government consumption goods only. C. public capital goods only. D. government consumption goods, public capital goods, and transfer payments.