In 1791, Alexander Hamilton suggested
a. the abolishment of all state-chartered banks
b. the creation of open market operations
c. the creation of a nationally chartered bank
d. the abolition of the money supply
e. creative accounting to deny Revolutionary debt
C
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If you have a checking account at First National Bank, the account is
A) an asset to both you and First National. B) a liability to both you and First National. C) an asset to First National and a liability to you. D) an asset to you and a liability to First National.
A major element of the concepts of inflation and deflation is
A) the idea that price changes are measured daily. B) their dependence on average rather than individual prices. C) the requirement that ALL prices must be moving in the same direction. D) each household's willingness to report what they pay for goods and services each month.
Assume that the loans made by the Paris First National Bank contracted from $16 million to $12 million. If the legal reserve requirement was increased from 20 percent to 40 percent, how much would the money supply shrink?
a. $5 million b. $10 million c. $15 million d. $20 million e. $24 million
Under the adaptive expectations hypothesis, which of the following is the effect of a shift to a more expansionary monetary policy?
a. In the short run, the real rate of output will be unaffected, but in the long run, it will increase. b. In the short run, the real rate of output will increase, but in the long run, it will be unchanged. c. There will be a permanent increase in the real rate of output, but the inflation rate will also be a little higher. d. In the short run, the impact on the real rate of output is uncertain, but in the long run, output will increase.