A Fed sale of government securities leads to ____ in bank reserves and ____ in the money supply.
A. an increase; an increase
B. an increase; a decrease
C. a decrease; a decrease
D. a decrease; an increase
C. a decrease; a decrease
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When the Federal Reserve engages in a repurchase agreement to offset a withdrawal of Treasury funds from the Federal Reserve, the open market operation is said to be
A) defensive. B) offensive. C) dynamic. D) reactionary.
Economists think that the best way to determine the value of a human life is to
a. evaluate the value of a person's expected earnings in the labor market. b. evaluate the risks people are willing to take and what they would have to be paid to take them. c. determine a person's accumulated wealth at the time of death. d. do nothing; human life is priceless.
France has a higher natural rate of unemployment than the United States. This suggests that
a. France is at a higher point on its long-run Phillips curve and so has higher inflation than the United States. b. France is at a lower point on its long-run Phillips curve and so has lower inflation than the United States. c. France's Phillips curve is to the left of that of the United States, possibly because they have higher inflation. d. France's Phillips curve is to the right of that of the United States, possibly because they have more generous unemployment compensation.
If we plotted the given data on a graph with R&D expenditures on the horizontal axis, the:
A. interest-rate cost-of-funds curve would be a vertical line.
B. interest-rate cost-of-funds curve would be a horizontal line.
C. expected-rate-of-return curve would slope upward.
D. expected-rate-of-return curve would be a horizontal line.