Suppose households attempt to decrease their money holdings. To counter this decrease in money demand and stabilize output, the Federal Reserve will
a. increase government spending.
b. increase the money supply.
c. decrease government spending.
d. decrease the money supply.
d
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If you generate a new idea that has not been implemented yet by anyone else, and the idea offers a more profitable use of some resource, it is likely an example of:
A. innovation. B. market failure. C. intervention. D. a goal other than profit.
Why is a period of stagflation part of the normal aftermath of a period of excessive aggregate demand?
Why is real wealth considered an autonomous factor?
a. It has a largely unpredictable effect on consumer spending. b. It remains fixed in the short run. c. It can change even if income does not change. d. It has only a marginal effect on consumer spending.
The data suggest that in the European Union countries, the natural rate of unemployment
A) is now higher than in the U.S. B) is no longer a relevant concept. C) has steadily declined over the past two decades. D) will soon exceed the percentage of the labor force that is working. E) has become less "natural," since it is now almost entirely determined by the policies of a few large corporations.