If there is a recession, the Fed would most likely
a. increase bank reserves by raising the discount rate.
b. increase bank reserves by buying government securities.
c. decrease bank reserves by raising the discount rate.
d. decrease bank reserves by selling government securities.
e. decrease bank reserves by lowering the legal reserve requirement.
B
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Refer to the scenario above. Which investment option will a risk-averse individual choose?
A) He will choose to invest in Option A. B) He will choose to invest in Option B. C) He will choose to invest in Option C. D) He will be indifferent in investing in any of the three options.
In the non-market-clearing model, "involuntary" unemployment results because
A) real wages are too high. B) real wages rise when aggregate demand increases. C) real wages fall when aggregate demand increases. D) wages and prices are sticky.
Productivity growth slowed rapidly after 1973. Bruno and Sachs argue that the slowdown is partially explained by
A) reduced growth in capital per capita since increasing numbers of women entered the labor force. B) the reduction in savings rates caused by inflation and the U.S. tax system. C) the "residual" nature of technological change. D) the rapid increase in the relative price of energy.
Which of the following statements is correct?
a. Economists almost always find it easy to conduct experiments in order to test their theories. b. Economics is not a true science because economists are not usually allowed to conduct experiments to test their theories. c. Economics is a social science rather than a true science because it cannot employ the scientific method. d. Economists are usually not able to conduct experiments, so they must rely on natural experiments offered by history.