In the market for reserves, if the federal funds rate is between the discount rate and the interest rate paid on excess reserves, a ________ in the reserve requirement ________ the demand for reserves, raising the federal funds interest rate,

everything else held constant. A) rise; decreases
B) rise; increases
C) decline; increases
D) decline; decreases


B

Economics

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Assuming that the government can act immediately before the multiplier takes effect, then to offset a reduction in investment by $1 billion, government purchases must be:

A. decreased by $1 billion. B. increased by $1 billion. C. increased by $2 billion. D. increased by $0.5 billion.

Economics

Increases in productivity per person lead to increases in per capita income, which we call:

A. economic growth. B. the GDP deflator. C. the producer productivity index. D. GDP per capita.

Economics

Which of the following statements is true about purchasing power parity (PPP)?

a. PPP is the normal state between two nations because international markets are perfectly competitive. b. PPP is the normal state between two nations because of government regulations and central bank intervention. c. PPP is the normal state between two nations because interest rates, the spot exchange rate, and the forward exchange rate all adjust to create this condition. d. PPP is the normal state between two nations because arbitrageurs take advantage of any imbalances. e. PPP is rarely the case for most nations in the short-run, but exchange rates tend to move in the direction of PPP in the long run.

Economics

_____ and _____ are the two most important financial intermediaries

Fill in the blank(s) with correct word

Economics