Table 29-1Effects of an open-market transaction on the balance sheets of banks and the fed (in millions of dollars)
Banks
?
Federal Reserve System
?
Assets
Liab.
Assets
Liab.
Reserves +$10
?
U.S. Gov’t
Bank Reserves
U.S. Gov’t
?
Sec. +$10
+$10
Securities?$10
?
?
?
?
In Table 29-1, if the required reserve ratio is 10 percent, what will happen to the money supply? Use the oversimplified money multiplier in your calculations.
A. The money supply will decrease by $100 million.
B. The money supply will decrease by $10 million.
C. The money supply will not change.
D. The money supply will increase by $10 million.
E. The money supply will increase by $100 million.
Answer: E
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The data in the above table show that when the price level is 120
A) the unemployment rate is below its natural rate. B) the unemployment rate is above its natural rate. C) money wages rates will rise in the future. D) the long-run aggregate supply curve will shift leftward in the future.
All of the following products are likely to have significant network externalities except
A) cat food. B) cell phones. C) Twitter. D) popular board games.
Workers covered by defined contribution pension plans retire at later ages than workers covered by defined benefit plans
Indicate whether the statement is true or false
What fiscal policies did the government implement in response to the 2008-2009 recession? Can we be certain that these policies were effective? Explain