If the Fed buys government securities, then there is
A. a decrease in the discount rate.
B. an increase in the required reserve ratio.
C. an increase in the supply of money.
D. a decrease in the supply of money.
Answer: C
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The above table shows the demand schedule and supply schedule for chocolate chip cookies. What is the equilibrium quantity and equilibrium price for chocolate chip cookies?
A) 7 pounds, $3.00 per pound B) 2 pounds, $3.00 per pound C) 2 pounds, $6.00 per pound D) 4 pounds, $5.00 per pound
Suppose that the Federal Reserve issued bonds in the amount of $45 million and the reserve requirement was 10%, what would be the resulting change to the monetary base?
A) $45 million B) $450 million C) $4.5 million D) The bond issuance would not impact the monetary base only the money stock.
In a small open economy,
Sd = $5 billion + ($100 billion) rw, Id = $10 billion - ($50 billion) rw, Y = $50 billion, G = $3 billion, rw = .06. (a) Calculate the current account balance. (b) Calculate net exports. (c) Calculate desired consumption. (d) Calculate absorption.
The steeper the LM curve
A) the more effective is monetary policy. B) the less effective is monetary policy. C) the greater is the interest-sensitivity of investment. D) the greater is the interest-sensitivity of the money supply.