The Federal Reserve System regulates the money supply primarily by
A. controlling the production of coins at the U.S. mint.
B. altering the reserve requirements of commercial banks and thereby the ability of banks to make loans.
C. restricting the issuance of Federal Reserve Notes because paper money is the largest portion of the money supply.
D. altering the reserves of commercial banks, largely through sales and purchases of government bonds.
Answer: D
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A) are more price-sensitive; are less price-sensitive B) are less price-sensitive; are more price-sensitive C) have high levels of wealth; have low levels of wealth D) are more status-conscious; are less status-conscious
A profit-maximizing, price-taking firm should cease production whenever: a. the firm is making a loss
b. the firm is earning zero economic profit. c. the price is less than minimum average fixed cost. d. the price is less than minimum average variable cost.
The practice of securitization of mortgages:
A. pooled high-risk mortgages together, which raised the prices of them to investors. B. allowed investors to profit from the mortgage payments without being exposed to any risk. C. pooled the risk of mortgages, allowing higher risk mortgages to be more safely sold to investors. D. was undertaken by government to guarantee the values of real estate.
If the government imposes a price ceiling below the equilibrium price,
a. it must then buy up the surplus that is generated b. there will be an excess demand c. there will be an excess supply d. everyone who wants to buy this good will be happy e. the intent is to benefit producers