A monetary stimulus is designed to shift the
A. AD curve to the left.
B. AS curve to the right.
C. AD curve to the right.
D. AS curve to the left.
Answer: C
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Answer the next question on the basis of the following consolidated balance sheet of the commercial banking system. Assume that the reserve requirement is 10%. All figures are in billions.Assets (billions of dollars)Liabilities & Net Worth (billions of dollars)Reserves$60Checkable deposits$600Securities140Stock shares260Loans260 Property400 Suppose the Fed wants to reduce the money supply by $400 billion to drive up interest rates and dampen inflation. Assuming that the money multiplier is operating to full effect, to accomplish the desired reduction, the Fed could ________.
A. sell $40 billion of U.S. securities to the banks B. buy $40 billion of U.S. securities from the banks C. buy $20 billion of U.S. securities from the banks D. sell $20 billion of U.S. securities to the banks
A logical starting point from which the study of international trade begins is
a. the recognition that not all markets are competitive. b. the recognition that government intervention in markets sometimes enhances the economic welfare of the society. c. the principle of absolute advantage. d. the principle of comparative advantage.
Which one of these is not a characteristic of capitalism?
A. Central planning B. Private property C. The price mechanism D. Competition
If the federal government wishes to move the economy out of a recessionary gap, the appropriate fiscal policy is a(n)
A. increase in taxes. B. decrease in government purchases. C. decrease in transfer payments. D. None of the above is correct.