If the Fed makes an open market purchase of $1 million of government securities, the monetary base
A) is unchanged in size, though its composition changes.
B) will decrease by a multiple of $1 million over time.
C) will increase by a multiple of $1 million over time.
D) is decreased by $1 million.
E) is increased by $1 million.
E
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A macroeconomic model obeys the "natural rate hypothesis" by incorporating
A) the assumption of nominal wage stickiness. B) a vertical LAS curve. C) imperfect information. D) a vertical AD curve.
Munn v Illinois (1877) was particularly important with regard to government regulation because it
(a) upheld the traditional right of businesses to act freely without interference by government. (b) established the right of government to regulate any business that was deemed "clothed" in the public interest. (c) established the right of government to regulate any and all businesses wherever such regulation was deemed desirable to promote competition. (d) established the right of government at any level to regulate any business activity if such regulation was deemed desirable for any reason.
The payments to owners of capital include
a. interest and profits. b. debt and taxes. c. wages and salaries. d. expenses and bonuses. e. All of the above are correct.
The multiplier ensures that equilibrium GDP equals full-employment GDP.
Answer the following statement true (T) or false (F)