Each of the following would decrease the supply of U.S. dollars, shifting the supply curve for dollars to the left, EXCEPT:
A. a decreased preference for foreign-made goods.
B. a decrease in the real interest rate on foreign assets.
C. a depreciation of the U.S. dollar relative to other currencies.
D. a decrease in U.S. real GDP.
Answer: C
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Banks would be expected to minimize holding excess reserves because this practice is
A. illegal.
B. not profitable.
C. technically difficult.
D. subject to a stiff excess reserves tax.
The consumer price index for the current year measures the cost of a standard basket in the ________ year relative to the cost of the same basket in the ________ year.
A. current; current B. base; current C. base; index D. current; base
Which of the following is likely to happen if the quantity of bank reserves held at the Fed increases?
A) The stock of money in the economy increases. B) The number of loans issued by banks decrease. C) Bank deposits decrease. D) The real interest rate increases.
The risk premium is negative when tastes are risk averse.
Answer the following statement true (T) or false (F)