When the Fed conducts an open market operation by purchasing securities from a bank, ________
A) public holdings of securities increase
B) the bank's deposits increase but its reserves do not change
C) the bank's deposits increase but its reserves decrease
D) the bank's reserves increase
D
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In the 1970s we had _____ recessions and in the 1980s we had _____ recessions.
Fill in the blank(s) with the appropriate word(s).
Classical growth theory asserts that
A) growth in real GDP per person is temporary. B) only some countries can have economic growth. C) real GDP growth will eventually be a constant 3 percent per year. D) nominal GDP growth is most important.
A government can impose an import quota or an equivalent tariff that achieves the same impact on trade. What is the key difference in the welfare outcomes of these two policy options?
A) The domestic quantity supplied is larger under the tariff policy. B) The domestic price is higher under the tariff policy. C) The domestic price is lower under the tariff policy. D) The government captures some of the profits from foreign suppliers through the tariff revenue.
The equation for the tax multiplier is
a. 1 b. MPS/(1 - MPC) c. (1 - MPC)/MPC d. (1 - MPC)/MPC e. MPC/(1 - MPC)