Expansionary monetary policy is essentially finished once the Fed reduces the federal funds rate to zero
a. True
b. False
Indicate whether the statement is true or false
False
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If the Fed desired to reduce the federal funds rate,
A) it would conduct an open market sale, reducing reserve supply. B) it would conduct an open market purchase, increasing reserve supply. C) it would conduct an open market sale, increasing reserve demand. D) it would conduct an open market purchase, reducing reserve demand.
In the short run, efforts to reduce the unemployment rate are likely to cause
a. a decrease in the inflation rate. b. an increase in the inflation rate. c. no change in the inflation rate. d. Uncertain-economists have found no relationship between the two variables.
The aggregate demand curve slopes downward indicating that
a. an increase in the general price level will reduce the aggregate quantity of goods and services demanded. b. an increase in the general price level will increase the aggregate quantity of goods and services demanded. c. a change in the interest rate will alter the aggregate quantity of goods and services demanded. d. consumers substitute between domestic-made and foreign-made goods as their relative prices change.
If depositors lose confidence in their bank and immediately demand their money back, banks ________ pay all the depositors because ________ of their deposits are kept as cash reserve
a. would; all b. would not; all c. would; only a fraction d. would not; only a fraction