If the Fed sells securities on the open market, this will
A. reduce banks' excess reserves.
B. increase banks' excess reserves.
C. leave banks' excess reserves unchanged.
D. lower the reserve requirement.
A. reduce banks' excess reserves.
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Price discrimination only occurs under monopoly.
Answer the following statement true (T) or false (F)
With rational expectations, a policy that would increase AD would lead to: a. higher inflation and higher real output in the short run
b. higher inflation and lower real output in the short run. c. higher inflation and an indeterminate effect on real output in the short run, if people's expectations were correct. d. higher inflation and no change in real output, if people's expectations were correct in the short-run.
Who receives corporate interest before any disbursement of profit is made to others?
a. employees b. management c. shareholders d. banks e. bondholders
If the interest rate is 8 percent, then the present discounted value of $100 to be received two years from now is closest to
A. $116.00. B. $86.00. C. $96.00. D. $128.00.