If the Federal Reserve sells $1,000 in bonds and, as a result, the money supply decreases by $2,500, what is the required reserve ratio?
a. 0.4
b. 2.5
c. 0.5
d. 0.1
e. 0.2
A
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Households will choose to save more if
A) income is expected to decrease in the future. B) current disposable income increases. C) Both answers A and B are correct. D) Neither answer A nor B is correct.
If the world terms of trade for a country are somewhere between the domestic cost ratio of H and that of F, then
A) country H but not country F will gain from trade. B) country H and country F will both gain from trade. C) neither country H nor F will gain from trade. D) only the country whose government subsidizes its exports will gain. E) country F but not country H will gain from trade.
The CPI is based on an:
A. average of the goods and services purchased by "urban consumers." B. average of the goods and services purchased by "rural consumers." C. average of the two baskets of goods and services purchased both by "urban" and by "rural" consumers. D. aggregated average meant to reflect the statistical average consumption.
Which of the following explains the rise in income inequality in the United States from 1970 to 2011?
a. An increase in minimum wages. b. An increase in the demand for skilled labor. c. An increase in the demand for unskilled labor. d. Reduced international trade with low-wage countries.