When the Fed buys government securities
A. reserves increase, leading to a decrease in the money supply by an amount more than the purchase of the government securities.
B. reserves decrease, leading to a decrease in the money supply by an amount more than the purchase of the government securities.
C. reserves decrease, leading to a increase in the money supply by an amount more than the purchase of the government securities.
D. reserves increase, leading to a increase in the money supply by an amount more than the purchase of the government securities.
Answer: D
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If tax revenues equal 20 percent of total output and government expenditures equal 25 percent of total output, then there is a:
A. trade surplus. B. trade deficit. C. government budget deficit. D. government budget surplus.
Under a system of private property, could a 60-year-old owner of a tree farm benefit by planting and caring for
a. No, the farmer will be dead before the crop will be ready for harvest. b. No, the value of the farmer's land will decline since he is taking it out of production for the next 50 years. c. Yes, the farmer will benefit because this action will increase the value of the land if and when the farmer decides to sell. d. Yes, but only if the project is subsidized by the government or private conservation groups.
What is meant by the statement that "optimal decisions are made at the margin"?
What will be an ideal response?
How does the increasing use of MP3 players affect the market for compact discs?
A) The demand curve for compact discs shifts to the right. B) The supply curve for compact discs shifts to the left. C) The supply curve for compact discs shifts to the right. D) The demand curve for compact discs shifts to the left.