If the demand for reserves remains constant and the market federal funds rate is below the target rate, the Fed would:
A. do nothing; the Fed will let the market work.
B. decrease the IOER.
C. increase the supply of reserves.
D. increase the IOER.
Answer: D
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If the MPC = 1, the spending multiplier is:
A. infinite. B. zero. C. 1. D. 10.
Creative destruction is least beneficial to:
A. workers in the "destroyed" industries. B. workers in the "created" industries. C. consumers. D. society as a whole.
Refer to the information provided in Figure 28.7 below to answer the question(s) that follow.
Figure 28.7Refer to Figure 28.7. If the economy is at Point B, the cost of raw material decreased dramatically, and the aggregate demand did not change, the economy could move to Point
A. A. B. E. C. C. D. D.
An incentive
A) could be a reward but could not be a penalty. B) could be a penalty but could not be a reward. C) could be either a reward or a penalty. D) is the opposite of a tradeoff.