Which of the following actions by the Fed would cause the money supply to increase?
A. Purchases of government bonds from banks.
B. An increase in the reserve requirement.
C. An increase in the discount rate.
D. Sales of government bonds to the public.
A. Purchases of government bonds from banks.
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Refer to the table above. For trade to occur along the lines of comparative advantage, wages in A relative to wages in B (measured in the same currency)
A) must be at least twice but less than 3 times as great. B) must be less than three times as small. C) must be greater than $2 but less than $3. D) Need more information to answer.
If households save $40 billion less at each level of income and the marginal propensity to consume (MPC) is 0.8, the aggregate expenditure line will _____
a. intersect the 45-degree line at a real GDP of $40 billion b. shift upward by $40 billion c. shift downward by $40 billion d. shift upward by $200 billion because of the multiplier mechanism e. shift downward by $200 billion because of the multiplier mechanism
Fixing exchange rates reduces
a. the demand for currency b. the quantity demanded of currency c. the supply of currency d. the quantity supplied of currency e. uncertainty associated with international trade
According to Adam Smith, individual self-interest
a. is a powerful force for economic progress when it is directed by competitive markets. b. is a powerful force for economic progress when individuals are wisely directed by a strong central government. c. is a major factor in retarding the economic progress of humankind. d. could be either a positive or negative force for economic progress, depending on the moral influences of political leaders.