Classical economists assumed that
A) wages were inflexible. B) individuals suffered from money illusion.
C) prices were sticky. D) none of the above.
D
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Why do banks create money? Do they create money to help the Federal Reserve control the money supply or is there a more basic reason?
What will be an ideal response?
If a central bank does not want to allow the domestic currency to depreciate, it will ________ international reserves by purchasing its currency, thereby ________ the monetary base and increasing the risk of higher unemployment
A) lose; decreasing B) lose; increasing C) acquire; decreasing D) acquire; increasing
Which of the following statements regarding the Federal Open Market Committee is correct?
a. Only the five voting regional Fed presidents attend the meetings. b. All regional Fed presidents attend and vote at the meetings. c. All regional Fed presidents attend the meetings, but only five get to vote. d. Regional Fed presidents may neither attend nor vote the meetings.
The Fed has the power to increase or decrease the number of dollars in the economy through the decisions of
a. the Board of Governors. b. the FOMC. c. the regional Federal Reserve Bank presidents. d. the U.S. Treasury.