When a central bank sells bonds, cash reserves throughout the financial system increase, interest rates fall, and investment spending increases
Indicate whether the statement is true or false
FALSE
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The Fisher effect ________
A) comes from combining the Fisher equation and the classical dichotomy B) predicts that in the long run nominal rates will rise with increases in expected inflation C) shows that in high inflation we typically see high nominal interest rates D) all of the above E) none of the above
The World Bank was formed in
A) 1930. B) 1960. C) 1945. D) 1918.
If you drive on a rural stretch of highway and come upon an intersection in which there are two gas stations, and you know them to be the only ones for 100 miles, they are
A. monopolistic competitors. B. perfect competitors. C. monopolists. D. oligopolists.
Assume a farmer is deciding whether or not to produce corn on an acre of land OR produce nothing on the ground leaving it lay idle. Which of these costs ARE likely to be 'MARGINAL' costs of producing corn? A = interest on a loan used to buy the land, B = property taxes, C = the corn seed, D = machinery (depreciation, repairs), E = weed control, F = fertilizer, G = hired labor to help with planting and harvest, H = income taxes, I = crop insurance, J = property insurance.
a) All are marginal costs b) A, B c) C, D, E, F d) C, D, E, F, G, H, I e) C, D, E, F, G, H, I, J