The money supply decreases if the Fed
a. sells Treasury bonds. The larger the reserve requirement, the larger the decrease will be.
b. sells Treasury bonds. The smaller the reserve requirement, the larger the decrease will be.
c. buys Treasury bonds. The larger the reserve requirement, the larger the decrease will be.
d. buys Treasury bonds. The smaller the reserve requirement, the larger the decrease will be.
b
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If markets are left to their own devices, the ________ a good or service is desired by buyers, the ________ its price will be
A) more; higher B) more; lower C) less; higher D) less; more unstable
A seller who continues to earn the same gross revenue from sales whether she raises or lowers her prices faces a demand curve that
A) contradicts the law of demand. B) is completely elastic. C) is completely inelastic. D) is unit elastic. E) is vertical.
The concept of ________ is based on the common-sense notion that a dollar paid to you in the future is less valuable to you than a dollar today
A) present value B) future value C) interest D) deflation
The per person production function representing both physical capital per person (K/N) and human capital per person (H/N) is
A) Y/N = (K/N)b(H/N)c. B) Y/N = (K/N)b + (H/N)c. C) Y/N = (K/N)b - (H/N)c. D) Y/N = (K/N)b/(H/N)c.