Which of the following central bank policies will lower the money supply?
a. Lowering the reserve ratio.
b. Lowering the discount rate.
c. Selling foreign currency in the foreign exchange market.
d. Buying government securities.
e. All of the above.
.C
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Sometimes increases in the wage rate will cause individuals to work more hours. It is also the case that this same increase could cause people to work fewer hours. What is happening to cause this variance?
What will be an ideal response?
In the case where the LM schedule is relatively steep and the IS schedule is relatively flat, the most effective policy would be a change in
a. money supply. b. government expenditures. c. government spending financed by a change in taxes. d. taxes.
Acceptance of the euro by the member state implies:
a. Common monetary policy b. Common fiscal policy c. Common foreign policy d. Common labor policy
Which of the following statements about the loanable funds market is correct?
a) The actions of investors affect the supply curve in the market. b) The actions of investors affect the demand curve in the market. c) The actions of savers affect the demand curve in the market. d) The actions of investors affect both the demand curve and the supply curve in the market.