Suppose that the Fed undertakes an open market sale, selling $1 million worth of securities to a bank. If the required reserve ratio is 8%, checkable deposits (or the money supply), would _______________ by ________________ million, assuming that there are no cash leakages and that banks hold zero excess reserves
A) rise; $12.5
B) decline; $8
C) decline; $12.5
D) rise; $8
C
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A distribution of goods is inefficient:
a. only when an economy is producing inside its production possibility frontier. b. only when an economy is producing at the wrong point on the production possibility frontier. c. either when an economy is producing inside the production possibility frontier or when an economy is producing at the wrong point on the production possibility frontier. d. when the economy is producing at the optimal point on the production possibility frontier.
Mattress savings are: a. used to buy bonds and shares
b. kept in a current account. c. kept in a savings account. d. kept on hand and not loaned out or invested.
The basic reason for the gas lines in 1973 and 1979 was _____.
Fill in the blank(s) with the appropriate word(s).
Suppose the United States chose to legalize the production, and use of marijuana and after doing so, found that the price fell. This would
A. indicate that the demand-side effect was smaller than the supply-side effect. B. be shockingly counter-intuitive, because there would be no supply-and-demand model that could explain it. C. indicate that the demand-side effect was greater than the supply-side effect. D. suggest that the supply curve is vertical.