Which of the following is likely to happen if the reserves held at the Fed by the private banks decrease?
A) Banks will make more loans. B) The M2 measure of money will decrease.
C) The nominal interest rate will decrease. D) Labor demand will increase.
B
You might also like to view...
Adverse selection occurs in the market for used cars because used car buyers
A) tend to have more accidents than new car buyers. B) have more information than used car sellers. C) have less information than used car sellers. D) have less incentive to maintain the value of their cars than new car buyers.
Firms can acquire access to savings indirectly through ________
A) issuing securities B) borrowing from banks C) the payment of taxes to the federal government D) the depositing of funds in depository institutions
In the aggregate expenditures model, if aggregate expenditures (AE) equal $4 trillion and GDP equals $3 trillion, then:
a. inventory depletion equals ?$1 trillion. b. inventory accumulation equals $1 trillion. c. investment equals ?$1 trillion. d. investment equals $1 trillion.
Why are observation and prediction more difficult for an economist than for a chemist?
a. Economists lack the scientific training that chemists have. b. Human behavior is more variable than the behavior of chemicals in a lab. c. Economists fails to use ceteris paribus as often as chemists do. d. Human behavior is basically irrational; chemicals behave as expected.