A downward shift in the Fed's policy reaction function is a ________ of monetary policy, and the aggregate demand curve ________.
A. easing; shifts right
B. tightening; shifts right
C. tightening; shifts left
D. easing; shifts left
Answer: A
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The FUN Bank has no excess reserves when a new deposit of $20,000 is made. The desired reserve ratio is 5 percent. After the deposit, but before making any loans, how much does The FUN Bank have in excess reserves?
A) $19,000 B) $20,000 C) $1,000 D) $9,000 E) $21,000
Progressive taxes are designed to make higher earners pay ______.
a. a lower percentage but more total taxes than others b. a higher percentage and more total taxes than others c. a higher percentage but less total taxes than others d. the same percentage but more total taxes than others
In the long-run framework, deficits reduce:
A. government consumption. B. investment. C. taxes. D. subsidies.
Beginning in about 1990, lending to and investing in developing countries began to increase. One explanation for this is that
A. interest rates in the United States were low. B. the governments in the developing countries began to encourage import-substituting manufacturing. C. after the successful Brady Plan, bank lending again became much more than half of all financial flows to developing countries. D. more developing countries began to offer insurance against exchange-rate risk.