Suppose the required reserve ratio is 10%, excess-to-deposit ratio is 10%, and the currency-to-deposit ratio is 20%. If the Fed buys $50 million worth of securities, what will happen to the money supply?
What will be an ideal response?
The money multiplier is (1 + 0.2 )/(0.2 + 0.1 + 0.1 ) = 3. The money supply will increase by 3 × $50 million = $150 million.
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Indicate whether the statement is true or false
The largest source of revenue for the federal government of the United States is from
A) tariffs collected on imported goods. B) property taxes imposed on private property. C) individual income taxes. D) sales taxes on items purchased for consumption.
A perfectly competitive firm's short-run supply curve is the:
a. average total cost curve. b. demand curve above the marginal revenue curve. c. same as the market supply curve. d. marginal cost curve above the average variable cost curve.
The difference in wage rates needed to make two jobs equally attractive to workers is known as a(n)
a. equilibrium wage rate b. competitive wage c. equalizing wage d. compensating wage differential e. efficient wage