When the fed wants to end a recession, they will act to ___ interest rates and ____ the money supply
a. increase; increase
b. increase; decrease
c. decrease; decrease
d. decrease; increase
Ans: d. decrease; increase
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An increase in the discount rate ________ bank reserves and ________ the money supply if banks respond appropriately to the change in the rate
A) increases; decreases B) decreases; decreases C) decreases; increases D) increases; increases
Describe the differences (in sign and relative magnitude) between the government purchases multiplier and the tax multiplier
What will be an ideal response?
How has the globalization of financial markets affected the way in which countries conduct their economic policies?
What will be an ideal response?
Economic theory is necessary and extremely important because of its relationship to economic policy.
Answer the following statement true (T) or false (F)