Changing the reserve requirement is
A. Effective in changing excess reserves but not the money supply.
B. A powerful tool that can cause abrupt changes in the money supply.
C. The most often-used tool on the part of the Fed.
D. A tool that has little impact on the money supply.
Answer: B
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If the demand for a product is elastic, the quantity demanded changes by a smaller percentage than the percentage change in price
Indicate whether the statement is true or false
Behavior of investors who simply follow the market is
a. contagion b. herding c. hedging d. pegging e. none of the above
An effect of international trade is
A) the increase in the average price of goods as the cost of transportation has to be included. B) the transmission of ideas around the world. C) that only countries that have absolute advantage in producing a good can participate. D) that the United States has a trade surplus.
The sale of bonds
a. and stocks to raise money is called debt finance. b. and stocks to raise money is called equity finance. c. to raise money is called debt finance, while the sale of stocks to raise funds is called equity finance. d. to raise money is called equity finance, while the sale of stocks to raise funds is called debt finance.