Why does the Fed rarely increase reserve requirements?
(A) It is not an effective way to manipulate the money supply.
(B) It is too complicated as a way to make minor adjustments.
(C) It can be disruptive to the whole banking system.
(D) It might not have a significant effect on the money available.
Answer: (C) It can be disruptive to the whole banking system.
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The difference between aggregate economic activity and potential output is called ________
A) the business cycle B) the output gap C) a recession D) a trough E) a co-movement
Which of the following is true of stocks?
a. Stock ownership is risky because the investor can never be sure what return they will earn or what the value of their stock holdings will be in the future. b. The riskiness of stocks is one reason why their average rate of return has been higher than investments like bonds that guarantee a specified nominal amount in the future. c. Both a and b are true. d. Neither a nor b is true.
"If fines for speeding when driving increase, fewer accidents will occur" is an example of a(n)
A) positive statement. B) normative statement. C) negative statement. D) inverse statement.
When a demand curve shifts, both the equilibrium price and quantity traded will change in the same direction as a result
a. True b. False Indicate whether the statement is true or false