If the Fed chooses a money supply target, then the interest rate may vary if money demand shifts
Indicate whether the statement is true or false
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According to Ricardian Equivalence, consumers may not respond to a tax cut ________
A) if that tax cut is directed solely at upper income groups B) if that tax cut is directed solely at lower income groups C) since they understand a tax cut today will lead to a tax increase in the future D) if they lack patriotic fervor
Suppose the downward sloping labor demand curve shifts rightward in a labor market with a single employer (monopsony). What happens to the marginal expenditure curve?
A) Shifts left B) Shifts right C) Remains the same D) We do not have enough information to answer this question.
Which of the following statements about natural monopoly is correct?
A) Governments regulate natural monopolies in order to ensure that costs of production are minimized. B) Governments regulate natural monopolies in order to ensure that the firm earns a normal profit. C) Governments regulate natural monopolies in order to prevent them from making profits. D) Governments regulate natural monopolies in order to keep their workers from earning wages that are too high.
Other things the same if reserve requirements are decreased, the reserve ratio
a. decreases, the money multiplier increases, and the money supply decreases. b. increases, the money multiplier increases, and the money supply increases. c. decreases, the money multiplier increases, and the money supply increases. d. increases, the money multiplier increases, and the money supply decreases.