The Fed can influence the money supply by
a. changing how much it lends to banks.
b. changing the interest rate it pays banks on the reserves they are holding.
c. using open-market operations.
d. All of the above are correct.
d
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________ is the relative ease and speed with which an asset can be converted into a medium of exchange
A) Efficiency B) Liquidity C) Deflation D) Specialization
Central banks get the purchasing power to buy government securities by:
a. Reducing currency in circulation. b. Making discount loans to banks. c. Taking loans from the government. d. Increasing their liabilities in the form of deposits from banks. e. None of the above.
Recently, salmonella outbreaks occurred due to the contamination of the processing of peanuts. Given this information, it is likely that:
A) The price of peanut products would rise and the quantity of peanut products produced would fall. B) The price of peanut products would rise and the quantity of peanut products produced would rise. C) The price of peanut products would fall and the quantity of peanut products produced would fall. D) The price of peanut products would fall and the quantity of peanut products produced would rise.
Suppose that the production function for the economy is Y = AK0.5L0.5. If the capital stock = 40,000, the quantity of labor = 10,000, and the efficiency index = 3, the equilibrium real rental price of capital is
A) $0.33. B) $0.75. C) $1.00. D) $2.22.