In the simple deposit expansion model, an expansion in checkable deposits of $1,000 when the required reserve ratio is equal to 10 percent implies that the Fed
A) sold $1,000 in government bonds.
B) sold $100 in government bonds.
C) purchased $1000 in government bonds.
D) purchased $100 in government bonds.
D
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If the substitution effect from a higher wage rate exceeds the income effect, then a higher wage rate
A) increases the quantity of labor supplied. B) decreases the quantity of labor supplied. C) shifts the supply of labor curve leftward. D) shifts the supply of labor curve rightward.
Which of the following is not consistent with the basic postulate of economics that incentives matter?
a. Farmers produce fewer bushels of wheat in response to an increase in the price of wheat. b. A politician votes against a proposal because most of his constituents oppose it. c. People drive less because of higher gas prices. d. People buy more milk in response to a reduction in the price of milk.
A ____________ is a gamble in which the expected value of the gamble is equal to 0.
Fill in the blank(s) with the appropriate word(s).
Under the buy one, get one free regime, the:
A. budget set expands. B. price is reduced by 50 percent. C. budget line rotates counterclockwise. D. indifference curve is changed.