To increase the money supply, the Fed could
a. sell government bonds.
b. auction more loans to banks.
c. increase the reserve requirement.
d. None of the above is correct.
b
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The above figure shows supply and demand curves for milk. If amount Q2 is produced in the market,
A) producer surplus is maximized. B) consumer surplus is minimized. C) a deadweight loss is generated. D) All of the above.
The price elasticity of demand for a vertical demand curve is:
a. 0. b. -1. c. 1. d. - infinity.
In an oligopolistic market there is likely to be:
A. neither allocative nor productive efficiency. B. homogeneous but not differentiated products. C. little consideration of the actions of rival firms. D. price-taking behavior on the part of firms.
Cash held by a bank in its vault is a part of the bank's
A. net worth. B. money supply. C. liabilities. D. reserves.