If the FOMC orders the sale of T-bills in the open market, then bank reserves are
A. decreased, but the money supply will remain unchanged.
B. decreased, and a multiple contraction of the money supply will occur.
C. increased, but the money supply will remain unchanged.
D. increased, and a multiple expansion of the money supply will occur.
Answer: B
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You would be more likely to find a motel room than a camping site if you were traveling through the West during the height of the tourist season and had no advance reservation if
A) camping sites are expensive to maintain. B) camping sites are less numerous. C) most camping sites were managed by government agencies. D) most motels do not accept advance reservations. E) motels more often accept credit cards.
The marginal cost to a grocer of selling avocados, which would have to be thrown away if they are not sold immediately, is approximately
A) the overhead cost per avocado sold. B) the price of replacing the inventory. C) their wholesale purchase price. D) zero.
The money supply known as M2:
a. includes large denomination time deposits. b. excludes interest-earning checking accounts in savings and loans. c. does not include money market mutual accounts. d. includes savings accounts and small denomination time deposits. e. includes large denomination repurchase agreements.
If giving to public goods is subsidized through deductions under a progressive income tax, the government subsidizes public goods consumed by higher income individuals at greater rates than public goods consumed by lower income individuals.
Answer the following statement true (T) or false (F)