If the Fed decides to use an open market operation to reduce the money supply by $1 million, and if the money multiplier is 10, then what total amount of Treasury securities must the Fed initially sell?
a. $10,000,000.
b. $1,000,000.
c. $100,000.
d. $10,000.
c
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Which of the following is a behavior inconsistent with the Efficient Markets Hypothesis?
A) diversification of one's portfolio B) avoiding active trading of stocks C) holding onto a losing stock while being more likely to sell a stock that has increased in value D) the purchase of a stock index fund
Which of the following is true about the consumer price index (CPI) and the GDP price index? a. Both measures weigh prices by quantities consumed in some base year
b. Both yield identical numbers for price level changes for any two years. c. Both CPI and GDP price index underestimate changes in the price level in an economy. d. The CPI measures changes in relative prices of goods, while the GDP price index measures changes in the absolute price level of a fixed basket of goods and services. e. CPI includes products that are widely used, while GDP price index includes all goods and services.
The law of supply states that, other things equal, an increase in
a. price causes quantity supplied to increase. b. price causes quantity supplied to decrease. c. quantity supplied causes price to increase. d. quantity supplied causes price to decrease.
As price falls along the elastic portion of a linear demand curve ________ decrease(s) while ________ increase(s).
A. only price; quantity demanded, consumer surplus, and consumer expenditures B. consumer surplus and price; quantity demanded and consumer expenditures C. quantity demanded and price; consumer surplus and consumer expenditures D. consumer expenditures, quantity demanded, and price; consumer surplus