The money supply increases when the Fed
a. buys bonds. The increase will be larger, the smaller is the reserve ratio.
b. buys bonds. The increase will be larger, the larger is the reserve ratio.
c. sells bonds. The increase will be larger, the smaller is the reserve ratio.
d. sells bonds. The increase will be larger, the larger is the reserve ratio.
a
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Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for mustard and that bratwurst and mustard are complements. What panel describes what happens in this market when the price of bratwurst falls?
A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
Consider the following T-account for a bank:
Assets Liabilities Reserves $1,000 Deposits $5,000 Loans $4,000 If the required reserve ratio is 20 percent and the bank is holding no excess reserves, the bank at this point can make no more loans.
Health insurance was not an important policy issues prior to 1940 because _____
a. less than 10 percent of the U.S. population had health insurance b. health care was so cheap c. of the widespread ability of local charitable hospitals d. most individuals were covered by veteran health benefits
Assume that the expectation of a recession next year causes business investments and household consumption to fall, as well as the financing to support it. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the net nonreserve international borrowing/lending balance and the monetary base in the context of the Three-Sector-Model? a. The
net nonreserve international borrowing/lending balance becomes more negative (or less positive) and monetary base falls. b. The net nonreserve international borrowing/lending balance becomes more negative (or less positive) and monetary base rises. c. The net nonreserve international borrowing/lending balance becomes more positive (or less negative) and monetary base falls. d. The net nonreserve international borrowing/lending balance and monetary base remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.