Prior to 2008, the primary tool used by the Fed to control the money supply was
a. the manipulation of the required reserve ratio banks must hold against their checking deposits.
b. the extension of loans to financial institutions.
c. the buying and selling of stocks and corporate bonds.
d. the buying and selling of U.S. Treasury securities.
D
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A. Everything else remaining unchanged, what is likely to happen to the credit demand curve of an economy if:
i. businesses in the economy see scope for growth and are planning to expand production in the future? ii. households are pessimistic about future incomes? iii. the government is planning to borrow money from financial institutions for investment in infrastructures? b. Everything else remaining unchanged, what is likely to happen to the credit supply curve of an economy if firms tend to hold on to retained earnings instead of paying dividends?
Economies of scale occur when the percentage increase in output
A) exceeds the percentage increase in all inputs. B) is less than the percentage increase in all inputs. C) exceeds the percentage decrease in all inputs. D) is less than the percentage decrease in all inputs.
Suppose an economy originally in long-run equilibrium experiences a decrease in aggregate demand. According to the classical model
A) real Gross Domestic Product (GDP) will not change but the price level will fall. B) real Gross Domestic Product (GDP) will fall, and then the price level will fall also. C) the price level will not change but real Gross Domestic Product (GDP) will fall. D) real Gross Domestic Product (GDP) will fall, wages will fall, but the prices of goods and services will stay the same.
One of the challenges for development economists working in health care is to figure out a way to:
A. force families to make better health care choices. B. alter the educational system in order to mandate that a certain number of students go into healthcare fields. C. influence markets in order to keep the costs of healthcare lower. D. give doctors the right incentives to practice good medicine.