The primary method for controlling the money supply in the United States is to limit the
A. Amount of currency that is printed.
B. Amount of money that is spent by changing income transfers.
C. Amount of money that is spent by changing tax policy.
D. Volume of loans the banking system can make.
Answer: D
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Firms use incentives to pursue their most fundamental goal, which is to maximize
A) profits. B) sales revenue. C) worker satisfaction. D) worker pay.
The difference between nominal and real interest rates is that
A) nominal interest rates are measured in terms of a country's output, while real interest rates are measured in monetary terms. B) nominal interest rates are measured in monetary terms, while real interest rates are measured in terms of a country's output. C) nominal interest rates can fluctuate, while real interest rates always remain fixed. D) real interest rates can fluctuate, while nominal interest rates always remain fixed. E) real interest rates are the same in every country, while nominal interest rates are different for every country.
Inefficient allocation of resources occurs when
A. no one can be made better off without having someone else give up something. B. it is possible to make some people better off without making others worse off. C. society is operating at a point high on the production possibilities frontier. D. society is operating at a point low on the production possibilities frontier.
Which of the following lists two things that both decrease the money supply?
a. make open market purchases and raise the reserve requirement ratio b. make open market purchases and lower the reserve requirement ratio c. make open market sales and raise the reserve requirement ratio d. make open market sales and lower the reserve requirement ratio