All of the following are tools available to the Fed for controlling the money supply except
A. The discount rate.
B. Open market operations.
C. The reserve requirement.
D. Taxes.
Answer: D
You might also like to view...
Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
If the Fed buys U.S. government securities from banks, the federal funds rate ________ and banks' reserves ________
A) does not change; increases B) falls; decrease C) rises; increase D) rises; decrease E) falls; increase
High-powered money minus reserves equals
A) reserves. B) currency in circulation. C) the monetary base. D) the nonborrowed base.
The economy will grow from points B to G in Figure 10-3 above over time because
A) per person saving and steady state investment will remain stable at points C and D respectively. B) per person capital will grow, point D to E since per capita savings exceed steady state investment, point C is greater than point D. C) per person capital will grow, point D to E since per capita savings is less than steady state investment, point C is greater than point D. D) per person saving and steady state investment will remain stable at points D and C respectively.