Assume that the required reserve ratio for the commercial banks is 25 percent. If the Federal Reserve Banks buy $3 billion in government securities from the non-bank securities dealers, then as a result of this transaction, the lending ability of the commercial banking system will increase by:
A. $4.5 billion
B. $9 billion
C. $12 billion
D. $15 billion
B. $9 billion
Economics
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What will be an ideal response?
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Classical economists think that the government ________ use fiscal policy to dampen the business cycle because prices and wages adjust ________
A) should not; rapidly B) should not; slowly C) should; slowly D) should; rapidly
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Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the long run would be:
A. P4 and Y1. B. P4 and Y2. C. P5 and Y1. D. P5 and Y2.
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Monopolistic competition and oligopoly are alike because firms in both market structures have some market power.
a. true b. false
Economics