If the Fed sells a U.S. Treasury bill to a member of the public, the banking system has
A. less reserves and the money supply tends to fall.
B. more reserves and the money supply tends to fall.
C. less reserves and the money supply tends to grow.
D. more reserves and the money supply tends to grow.
Answer: A
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Why are the long-run effects of an increase in aggregate demand on price and output different from the short-run effects?
What will be an ideal response?
Refer to the graph below representing the market demand curve for a monopolist’s output. Which of the following prices shown on the graph should the monopolist charge if it wishes to maximize its total revenue?
a. $12
b. $10
c. $8
d. Any of the above because total revenue does not change with a change in price.
One reason for the good record of democracies on economic growth is that:
A. people can become rich by competing for the limited economic resources. B. people can become rich by gaining economic resources in their favor. C. the public as a whole can become rich by supporting efficient policies that generate economic growth. D. the public as a whole can become rich by equally dividing the economic resources.
A monopolistically competitive industry has
A. many firms producing a differentiated product. B. many firms producing an identical product. C. a few firms producing a differentiated product. D. a few firms producing an identical product.