Central banks can increase the money supply by:
a. Increasing the discount rate.
b. Buying government securities.
c. Selling foreign exchange.
d. All of the above.
e. None of the above.
.B
You might also like to view...
What is likely to happen to the allocation of resources if there is a sudden increase in the demand for a good produced by a perfectly competitive industry?
What will be an ideal response?
If the demand curve for a product is horizontal, then
A) the demand for the product is perfectly inelastic. B) the demand for the product is perfectly elastic. C) only a certain amount of the product will be consumed regardless of price. D) the price elasticity of the product approaches zero.
When economists say the quantity supplied of a product has decreased, they mean the:
a. supply curve has shifted to the left. b. supply curve has shifted to the right. c. price of the product has risen, and consequently, suppliers are producing more of it. d. price of the product has fallen, and consequently, suppliers are producing less of it.
The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.