If the Fed buys a T-bill from an individual rather than from a bank, the effect on the money supply is
A. smaller because there is no multiplier process.
B. larger because of the multiplier process.
C. the same.
D. impossible to predict without knowing the value of the multiplier.
Answer: C
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In the market for reserves, if the federal funds rate is between the discount rate and the interest rate paid on excess reserves, a ________ in the reserve requirement ________ the demand for reserves, lowering the federal funds interest rate,
everything else held constant. A) rise; decreases B) rise; increases C) decline; increases D) decline; decreases
The Bureau of Labor Statistics counts a member of a surveyed household as an adult if that person is at least
a. 14 years old. b. 16 years old. c. 18 years old. d. 21 years old.
Refer to the accompanying figure. If the price is $4 today and there is no change in either supply or demand, one would expect the price in the future to be:
A. greater than $6. B. less than $4. C. greater than $4. D. $4.
The financing of investment spending is often made possible by
A. consumer spending. B. money supply creation. C. borrowing. D. tax reductions.