When the Federal Reserve wishes to, in the short run, increase real GDP, it
A. will increase the money supply by selling bonds.
B. will increase the money supply by buying bonds.
C. will decrease the money supply by selling bonds.
D. has no policy options that will accomplish this.
Answer: B
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Suppose the market demand curve for pizza can be expressed as QD = 100 - 2P + 3Pb, where QD is the quantity of pizza demanded, P is the price of pizza, and Pb is the price of a burrito
What is the relationship between burritos and pizza, from the point of view of consumers? A) They are independent. B) They are complements. C) They are substitutes. D) Not enough information to answer the question.
Changes in technology over time will result in
A) a more inelastic supply curve. B) a more elastic supply curve. C) a unitary elastic supply curve. D) no change in the elasticity of supply.
If there is a low degree of uncertainty combined with a low degree of asset specificity, _____ will be efficient
a. long-term contracts b. short-term contracts c. market transactions d. vertical integration
If the Fed lowers the required reserve ratio, __________ in the banking system will remain unchanged but __________ will rise. This will (likely) lead to an increase in new loans and checkable deposits and a(n) __________ in the money supply
A) excess reserves; vault cash; increase B) reserves; vault cash; decrease C) reserves; excess reserves; increase D) reserves; required reserves; increase E) none of the above