To increase the money supply, the Fed could
a. sell government bonds.
b. increase the discount rate.
c. decrease the reserve requirement.
d. None of the above is correct.
c
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Which of the following will happen if there is a fall in the supply of credit in an economy without any change in the demand for credit?
A) The real output will fall. B) The labor demand in the economy will increase. C) Its consumption expenditure will increase. D) The real interest rate will fall.
There is no deadweight loss from subsidy
a. True b. False Indicate whether the statement is true or false
According to Keynes, market economies:
A. quickly recover after they experience a significant decline in aggregate demand. B. are constantly experiencing a significant declines in aggregate demand. C. never experience significant declines in aggregate demand. D. may recover slowly after they experience a significant decline in aggregate demand.
Recall the Application about the Fed's response to the collapse of the investment house Bear Stearns as well as its handling of the 2008 financial crisis with respect to other financial institutions to answer the following question(s). According to this Application, the Fed increased its lending by hundreds of billions of dollars to financial institutions as a response to the ongoing financial crisis. This increase in loans to financial institutions increased the supply of money in the economy. When the supply of money increases, the money supply curve will:
A. shift to the right, increasing the interest rate. B. shift to the right, decreasing the interest rate. C. shift to the left, increasing the interest rate. D. shift to the left, decreasing the interest rate.