Why is it difficult for policy makers to rely on the theoretical discussion of the money multiplier to target the money supply?
A. The equation of exchange has been proven to be wrong.
B. There is no good measure of reserves in the economy.
C. The use of quantitative easing has made it impossible to accurately determine the money supply.
D. The amount of excess reserves and cash in the system varies.
Answer: D
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The labor market in Major League Baseball features
A) monopolistic competition between the teams and professional baseball players. B) an oligopoly by the League in employing professional baseball players that is offset by an oligopsony by the players in the labor market. C) a monopsony by the League in employing professional baseball players that is offset by the players' membership in a labor union. D) a monopoly by the League in employing professional baseball players that is offset by the players' membership in a labor union.
Which of the following are reported as liabilities on a bank's balance sheet?
A) reserves B) checkable deposits C) consumer loans D) deposits with other banks
If the public decides to hold smaller cash balances, this will cause a(n)
A. increase in interest rates. B. decrease in average paychecks. C. increase in nominal GDP. D. increase in velocity.
Whenever the Fed ________ excess reserves in the banking system, they tend to ________ the overall money supply
A) raises; reduce B) raises; increase C) lowers; increase D) lowers; stabilize