An increase in the reserve requirement ________ required bank reserves and ________ the money supply
A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases
B
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Say's law implies that
A) surpluses never occur. B) there will always be unemployment. C) surpluses or shortages are possible, but only for a short time. D) shortages never occur.
________ is a good measure of the opportunity cost of holding money
A) The real interest rate B) Liquidity preference C) Real income D) The inflation rate E) none of the above
When the inflation rate rises, the purchasing power of nominal income:
a. remains unchanged. b. decreases. c. increases. d. changes by the inflation rate minus one.
Changes in the quality of some goods and services, such as electromechanical calculators, are thought to give a downward bias to the consumer price index
a. True b. False Indicate whether the statement is true or false