If the Federal Reserve targets the interest rate and the money demand curve shifts to the left, then the Fed
A) can maintain the interest rate target, but at a higher quantity of the money supply.
B) cannot maintain the interest rate target.
C) can maintain the interest rate target with no change in the money supply.
D) can maintain the interest rate target, but at a lower quantity of the money supply.
D
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The multiplier effect
A) explains what causes an expansion. B) has no impact on equilibrium expenditure. C) reinforces the negative effects of any reduction in spending. D) explains what causes a recession. E) explains how the economy recovers from a recession.
Which of the following is a problem with or a limit on antitrust policy?
a. Competition may not require that many firms b. Abuse of antitrust c. Growth of international markets d. Growing doubt about the economic value of lengthy antitrust court cases e. All of the answers are correct
All of the following except one are reasons the demand deposit multiplier may be smaller in practice than in theory. Which one is not a valid reason?
a. Banks do not want to hold excess reserves. b. Some of the currency generated when bonds are purchased ends up outside of the banking system. c. Banks sometimes hold more than their required reserves. d. An open market operation may change the public's holding of cash. e. All of the above are not valid reasons.
Education is
A. generally financed at the state and local level. B. too expensive for the federal government. C. generally financed at the federal level. D. financed on a voluntary basis.