When the Fed supplies the banking system with an extra dollar of reserves, deposits ________ by ________ than one dollar—a process called multiple deposit creation
A) increase; less
B) increase; more
C) decrease; less
D) decrease; more
B
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If expected future incomes fall, this causes the nation's current:
a. Aggregate demand to fall, the average price level to fall, and real GDP to rise. b. Aggregate supply to rise, the average price level to rise, and real GDP to rise. c. Aggregate demand to rise, the average price level to rise, and real GDP to rise. d. Aggregate supply to fall, the average price level to rise, and real GDP to fall. e. Aggregate demand to fall, the average price level to fall, and real GDP to fall.
When might an employer be willing to increase wages?
a. when the quantity of labor supplied exceeds demand b. when workers are willing to undercut the established wage c. when the prevailing wage exceeds the equilibrium level d. when the prevailing wage is below the equilibrium level
If the Fed decides to control the euro/dollar exchange rate:
A. they will have to control the domestic rate of inflation or it won't work. B. they will also have to control the domestic interest rate. C. they will have to control the amount of banking system reserves. D. the market will determine the interest rate.
Most economists feel that overly strict financial regulation from 2000 to 2006 contributed to the financial crisis of 2007–2009.
Answer the following statement true (T) or false (F)