The Fed buys $1 million in bonds from a bond dealer. The bond dealer's bank experiences
A) an increase in assets of $1 million as its reserves increase and a decrease in liabilities as its transactions deposits fall.
B) no change in assets or liabilities. Assets both increased and decreased by the amount of the check.
C) a decrease in assets of $1 million as the checking account of the bond dealer increased, and a decrease in liabilities as the bank's deposits with the Fed increased by $1 million.
D) an increase in assets of $1 million as its reserves increase and an increase in liabilities of $1 million as the deposits in the bond dealer's transactions account increases by $1 million.
D
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A common resource is ________ and ________
A) rival; excludable B) nonrival; excludable C) rival; nonexcludable D) nonrival; nonexcludable
Everything else held constant, which of the following does NOT cause aggregate demand to increase?
A) an increase in net exports B) an increase in government spending C) an increase in taxes D) an increase in consumer optimism
Two goods are substitutes when a decrease in the price of one good
a. decreases the demand for the other good. b. decreases the quantity demanded of the other good. c. increases the demand for the other good. d. increases the quantity demanded of the other good.
Which group of economists believes that there is a natural rate of output that is relatively immune to short-run fluctuations in aggregate demand?
A. Supply-siders. B. Monetarists. C. Fiscal economists. D. Keynesians.