One problem with using discount rate changes to influence deposit creation or destruction is that
a. small changes in the rate do not have much impact
b. the discount rate changes are covert
c. banks like to borrow from the Fed, and they will borrow even more after the changes
d. the Fed must change the discount rate each time they meet
e. banks do not have enough control over their demand deposits
A
You might also like to view...
The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
During the 1960s, when confronted with moderate and stable inflation, people tended to form adaptive expectations of future inflation rates
Indicate whether the statement is true or false
Assume that disposable income equals $1000 and the mpc equals 0.6. If total consumption equal $800, then autonomous consumption is equal to
A) $0. B) $200. C) $800. D) $1000.
A recession is best defined as a period during which: a. the percentage of the population employed increases. b. employment, output, and income decrease
c. the average price level in an economy decreases. d. the usage of labor and capital resources increases. e. budget deficit and trade deficit decrease.