Suppose the Fed purchases $1 million in bonds in the open market. Explain how the money supply can increase by more than $1 million
What will be an ideal response?
Transaction deposits and reserves increase by $1 million as a result of the purchase. Since the reserve ratio is less than one, the bank now can loan some of the reserves to someone. If it does, then the transaction deposits of the borrower increase by the amount of the loan, so the money supply has increased further.
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According to the data on real U.S. GDP,
A. economic growth has been irregular, with some periods of downturns. B. economic growth has been consistent, but with a few downturns. C. economic growth has been extremely rapid, but also includes major collapses. D. economic growth has been slight, but downturns have also been eliminated.
The IMF granted in November of 2008 a $15 billion dollar loan to Hungary, which was at the time undergoing financial stress as a result of the global crisis
Indicate whether the statement is true or false
In the above table, the balance on the capital account for Country X is ________ billion dollars
A) -80 B) +35 C) +80 D) -35
When marginal revenue is zero for a monopolist facing a downward-sloping straight-line demand curve, the price elasticity of demand is:
a. greater than 1. b. equal to 1. c. less than 2. d. equal to 0.