What's the most common way for a central bank to change the money supply?
A. Buying bonds from or selling bonds to the government
B. Buying bonds from or selling bonds to the public
C. Using open-market operations
D. Changing tax collections
Answer: C
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When Joe's Gas raises its price for regular unleaded gasoline, total revenue from regular unleaded gas falls to zero. It must be the case that
A. there are not many good substitutes for Joe's regular unleaded gasoline. B. the demand for Joe's regular unleaded gasoline is perfectly elastic. C. the demand for Joe's regular unleaded is inelastic. D. consumers are switching to premium grades of gasoline.
________ occurs when one agent in a transaction knows about a hidden characteristic of a good
A) The free-rider problem B) The tragedy of the commons C) Adverse selection D) Moral hazard
An increase in currency held outside the banks is ________
A) a currency drain B) income C) a currency surplus D) wealth
Suppose the current account of a country is initially in balance. A new transaction occurs so that the current account is now in surplus. Official reserve balance is maintained before and after the transaction occurs. From this, we know that
A) the balance of trade is now in surplus. B) the balance of goods and services is now in surplus. C) the capital account is now in deficit. D) the government must make official reserve transactions.