Other things being equal, an expansion of commercial bank lending:
A. is desirable during a period of demand-pull inflation.
B. increases the money supply.
C. reduces the money supply.
D. changes the composition, but not the size, of the money supply.
Answer: B
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In the specific factors model, a 5% decrease in the price of food accompanied by a 5% decrease in the price of cloth will cause ________ in the welfare of labor, ________ in the welfare of the fixed factor in the production of food, and ________ in
the welfare of the fixed factor in the production of cloth. A) no change; no change; no change B) an increase; an increase; an increase C) a decrease; an increase; an increase D) an increase; a decrease; a decrease E) a decrease; a decrease; a decrease
During the Financial Crisis of 2007-2009, banks significantly increased their holdings of excess reserves. What impact did this have on the money multiplier? How would the Fed change the monetary base if it wanted to maintain a stable money supply?
What will be an ideal response?
Which of the two fiscal stimulus tools will ultimately have the same impact on aggregate spending?
A. $100 billion tax cut and $100 billion increase in government spending. B. $100 billion increase in transfer payments and $100 billion in tax cuts. C. $100 billion increase in government spending and $100 billion increase in transfer payments. D. All of the choices are correct.
Which of the following is said to occur when a firm with market power uses price discrimination between markets to increase its total profit?
A. Cyclical dumping B. Persistent dumping C. Predatory dumping D. Seasonal dumping