Bank reserves will increase over time when:
a. the Fed sells government securities on the open market.
b. the Treasury sells government securities on the open market.
c. depositors take funds out of their checkable deposit accounts.
d. the Fed buys government securities on the open market.
e. the Fed lowers the discount rate.
d
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Refer to the Article Summary. Implementing a negative interest rate policy, as was advocated by the president of the Federal Reserve Bank of Minneapolis, would be an example of ________ monetary policy designed to ________ aggregate demand
A) contractionary; increase B) expansionary; increase C) expansionary; decrease D) contractionary; decrease
The winner of a sealed-bid first-price auction is the participant who bid the ________ and pays the amount of the ________.
A) highest; second-highest bid B) highest; bid C) second-highest; bid D) second-highest; second-highest bid
Which of the following is TRUE about the effects of an excise tax if consumers are totally unresponsive to price changes?
A) Consumers pay all of the excise tax. B) Producers pay all of the excise tax. C) Consumers and producers share the excise tax equally. D) Neither consumers nor producers pay the excise tax.
When the economy is in a slump, labor productivity tends to fall because firms have
A. too little capital. B. too little labor. C. excess labor. D. excess capital.