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
B
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Some critics have argued that moving children to private schools might reduce the _________ of education.
A. pure public goods aspect B. positive externalities C. size of library holdings D. size of teachers unions influence
Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
The supply and demand model is the workhorse of the principles of economics because it:
A. follows directly from the inductive approach to economics. B. is a useful model by which students can be introduced to economic reasoning. C. does not have to have any empirical testing to back up the results of the model. D. is a perfect model and can never be improved upon.
When workers expect more inflation than actually occurs:
a. the Phillips curve becomes vertical. b. the long-run Phillips curve shifts to the right. c. the short-run Phillips curve shifts to the left. d. there will be a movement down the short-run Phillips curve. e. there will be a movement up the short-run Phillips curve.