Which of the following would shift the LM curve?
A) an increase in the tax rate
B) an increase in the real money supply
C) a reduction in business confidence
D) All of these.
B
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When a bank issues a checkable deposit and loans the funds out to a business, it has transformed
A) a financial asset for a saver into a liability for a borrower. B) a financial liability for a saver into a financial asset for a borrower. C) a short-term liability to a borrower into a long-term asset to a saver. D) one liability into another liability.
A change in the reserve requirement is the tool used least often by the Fed because it:
A. Does not affect bank reserves. B. Can cause abrupt changes in the money supply. C. Does not affect the money multiplier. D. Has no impact on the lending capacity of the banking system.
If the interest rate is 10 percent per year, and you have $100,000 now, which of the following is closest to what your $100,000 will be worth in one year?
A) $105,000 B) $110,000 C) $100,000 D) $102,000
Scarcity implies that
A. the satisfaction of one person's want means another person's want cannot be satisfied. B. the satisfaction of one person's want means another person's want can also be satisfied. C. the satisfaction of one person's want means another person will be more than satisfied. D. no person's wants can be satisfied.