The quantity of money decreases if
A) banks loan all excess reserves.
B) the Treasury Department issues fewer government securities.
C) the desired reserve ratio decreases.
D) the Fed buys U.S. government securities.
E) the currency drain ratio increases.
E
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If Y = $200 billion, c = 0.75, autonomous consumption = $10 billion, and T = $20 billion, induced saving is
A) $25 billion. B) $50 billion. C) $75 billion. D) $150 billion.
When economists say that people choose rationally, this means
a. they gather all relevant information before making their purchases b. once a pattern of behavior has been established, people tend to become set in their ways c. people respond in predictable ways to changes in costs and benefits d. people rarely make errors when they are permitted to make transactions e. once made, decisions are never reversed
If Kindle e-readers and Nook e-readers are substitutes, a higher price for Nooks would result in a(n)
a. increase in the demand for Nooks. b. decrease in the demand for Nooks. c. increase in the demand for Kindles. d. decrease in the demand for Kindles.
most frequently used monetary policy tool is
What will be an ideal response?