Which of the following will occur when the central bank pursues expansionary monetary policy?
A) a leftward shift in the money demand curve and a leftward shift in the money supply curve
B) a rightward shift in the money demand curve and a leftward shift in the money supply curve.
C) a leftward shift in the money demand curve and a rightward shift in the money supply curve.
D) a rightward shift in the money demand curve and a rightward shift in the money supply curve.
E) none of the above
E
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An open market purchase of securities by the Fed
A) increases banks' reserves and decreases banks' securities.
B) decreases banks' reserves and increases banks' securities.
C) decreases banks' total assets.
D) involves a bank purchasing government securities from the Fed.
Sara looks into her closet and discovers a pair of like-new shoes she no longer wears because they are out of fashion. From the economist's perspective, was Sara behaving rationally when she bought those shoes?
A) No. If any of a person's decisions have poor results, that person is irrational. B) Yes, Sara didn't buy those shoes when they were out of fashion. C) No. The rationality assumption states that rational people never make mistakes. D) It's not clear because psychology, not economics, deals with the rationality assumption.
Which of the following are not important areas of remaining scientific uncertainty regarding global climate change?
A) Whether or not greenhouse gases trap heat in the atmosphere. B) Whether or not the planet has warmed on average. C) Whether or not agriculture in the United States will be adversely affected by climate change. D) Whether or not concentrations of carbon dioxide have increased in the atmosphere.
Which of the following programs is off-budget?
A. Medicare B. Defense C. Student loans D. Interest on the debt