Federal Reserve Notes:
a. Are assets in the balance sheet of the Federal Reserve.
b. Enter the economy when U.S. financial institutions demand cash from the Federal Reserve.
c. Enter the banking system every time the Federal Reserve sells government securities.
d. All the above are true.
e. None of the above is true.
.B
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When a player randomly chooses the strategy to play, with each strategy given a fixed probability of being chosen, we say that the player is using
a. a mixed strategy. b. a pure strategy. c. a dominant strategy. d. a Stackelberg strategy.
Assume that the reserve requirement is 25%. If the Federal Reserve sells $120 million in government securities to the general public, the money supply will immediately ________.
A. increase by $120 million with this transaction, and the increase in money supply could eventually reach a maximum of $480 million B. increase by $120 million with this transaction, and the increase in money supply could eventually reach a maximum of $360 million C. decrease by $120 million with this transaction, and the decrease in money supply could eventually reach a maximum of $480 million D. decrease by $120 million with this transaction, and the decrease in money supply could eventually reach a maximum of $360 million
Recent research by Keynesians and classicals has led to
A) a reconciliation of the types of models they use. B) the recognition by classical economists that prices adjust very slowly. C) convincing evidence that TFP shocks are the dominant force affecting the business cycle. D) the refutation of the efficiency wage model.
An important effect of foreign currency speculators is that
a. they have consistently lost money and have left the market. b. they have pushed exchange rates to wider extremes than most economists predicted. c. they actually limit the volatility of exchange rate movements. d. they have had no effect at all on exchange rate volatility.