If the actual money multiplier equals the potential money multiplier, and if the Fed wishes to reduce the money supply by $1 million when the reserve ratio is 10 percent, then the Fed should
A. buy $100,000 of government securities.
B. sell $10,000 of government securities.
C. sell $100,000 of government securities.
D. buy $10,000 of government securities.
Answer: C
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In the fourteenth century, the Western African Emperor Kankan Musa traveled to Cairo where he gave away much gold, which was in use as a medium of exchange. We would predict that this increase in gold
a. raised both the price level and the value of gold in Cairo. b. raised the price level, but decreased the value of gold in Cairo. c. lowered the price level, but increased the value of gold in Cairo. d. lowered both the price level and the value of gold in Cairo.
Refer to Figure 8.9. This farmer's profit-maximizing level of output is __________ units of output. A) 100 B) 350 C) 500 D) 700
The rate of interest affects agriculture because
A) A high interest rate suggests a stronger dollar which depresses farm export demand. B) A low interest rate lowers farm expenses. C) A high interest rate reduced the capitalized value of farmland. D) All of the above.
According to the above figure, the average propensity to save (APS) is zero at point
A. D. B. J. C. I. D. F.