The Fed makes a loan to your bank by
a. creating a deposit in your bank's reserve account
b. moving a deposit from some other bank's reserve account to your bank's reserve account
c. delivering new, uncirculated currency to your bank's vault
d. taking over some of your bank's liabilities
e. moving liabilities from your bank to other banks
A
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Suppose that the economy is producing above potential GDP and the Fed implements the correct change in monetary policy, but not until after the economy has passed the peak of the boom. Then
A) the Fed's contractionary policy will result in too small of a decrease in GDP. B) the Fed's expansionary policy will result in too small of a decrease in GDP. C) the Fed's contractionary policy will result in too large of a decrease in GDP. D) the Fed's expansionary policy will result in too large of an increase in GDP.
The above table shows a short-run production function for Albert's Pretzels. The marginal product of labor
A) rises then falls as the amount of capital increases. B) falls then rises as the amount of labor increases. C) is greater than or equal to the average product of labor for all amounts of labor. D) is less than or equal to the average product of labor for all amounts of labor.
An increase in the price of corn will lead to
A) an upward (and leftward) movement along the demand curve for corn. B) a leftward shift in the demand curve for corn. C) a rightward shift in the supply curve for corn. D) an increase in the quantity of corn consumed.
If, due to rising demand, the price of cotton rose 15 percent while the prices of other goods and services rose an average of 10 percent,
a. the relative price of cotton has risen and one would expect the output of cotton to rise as a result. b. the relative price of cotton has risen and one would expect the output of cotton to fall as a result. c. the relative price of cotton has fallen and one would expect the output of cotton to rise as a result. d. the relative price of cotton has fallen and one would expect the output of cotton to fall as a result.