If the Treasury finances an expenditure by borrowing from the banking system, the money supply will not be affected if the banks
A) borrowed from the discount window to buy the government bonds.
B) had no excess reserves when they bought the bonds.
C) were not members of the Federal Reserve System.
D) had no other government securities in their portfolios.
B
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What will be an ideal response?
Which of the following countries spends the most per capita on health care?
A. Canada B. China C. Germany D. The United States
Usually policy makers ask advice from economists whose values are very different from their own.
Answer the following statement true (T) or false (F)
If a profit-maximizing competitive firm ________ compensate society for a negative externality, the firm will choose to produce where price equals marginal cost.
A. voluntarily chooses to B. is legally bound to C. is pressured to D. does not have to