Which is the most popular tool of the Fed used to control the stock of money?
A) Manipulating reserve requirements.
B) Buying and selling government bonds.
C) Manipulating the discount rate.
D) Issuing new U.S. Treasury bonds.
B
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Higher interest rates
A) reduce total planned real expenditures because they increase the cost of borrowing funds. B) reduce total planned real expenditures because they reduce the income of bankers and other creditors. C) increase total planned real expenditures because they increase the incomes of all people in the economy. D) increase total planned real expenditures because they lower the costs of building new plants and equipment.
Budget projections for 2014-2020 indicate both higher levels of government spending and large budget deficits. Non-Keynesian economists argue that this will lead to
a. lower taxes, which will reduce aggregate supply and retard long-term growth. b. growth rates above the historic average for the decade. c. an increase in aggregate demand and real output. d. higher interest rates, higher taxes, and sluggish future growth.
Suppose the goal of a union is to maximize the total income of all workers it represents. In this case, it will probably aim for a wage at which the elasticity of demand for workers is
A. 0 B. infinite. C. 1 D. ranging from 2 to 5.
More economic growth is not necessarily better unless the benefits of growth:
A. exceed the costs of growth. B. increase average labor productivity. C. increase human capital. D. increase real GDP per capita.