In a recession, the Fed's monetary policy aims to ________ the real interest rate, ________ aggregate demand, and ________ aggregate supply
A) decrease; increase; increase
B) decrease; increase; not change
C) increase; not change; increase
D) increase; increase; increase
E) increase; decrease; not change.
B
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Suppose you place your savings in a time deposit at the bank, and that bank lends some of those funds to a business that desires a loan. This is an example of
A) direct finance. B) indirect finance. C) asymmetric information. D) adverse selection.
A newly acquired microwave oven and a food processor will increase Chuck's productivity in the kitchen. Accordingly, he will
a. cook more and eat out less b. cook less and eat out more c. buy more ready-to-eat foods d. be more likely to hire a cook e. increase the quality of what he cooks but may or may not cook more
The principal concept behind comparative advantage is that a nation should
A. concentrate production on those products for which it has the lowest domestic opportunity cost. B. maximize its volume of trade with other nations. C. strive to be self-sufficient in the production of essential goods and services. D. use tariffs and quotas to protect the production of vital products for the nation.
When the Fed buys a $100,000 bond from a bond dealer
A. reserves of the banking system increase by $100,000, but the money supply can increase by more than $100,000. B. reserves of the banking system remain unchanged, but the money supply increases by $100,000. C. reserves of the banking system increase by $100,000, but the money supply will only be able to increase by something less than this amount. D. reserves of the banking system remain unchanged, but the money supply decreases by $100,000.