If Bank A sells a $100,000 U.S. Treasury bond to the Fed, Bank A's excess reserves will:
A. increase by $100,000.
B. increase by less than $100,000.
C. not change.
D. decrease by less than $100,000.
Answer: A
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An effective minimum wage tends to create unemployment among unskilled workers because it
A) reduces the demand for their labor services. B) increases the supply of their labor services. C) reduces the marginal productivity of their labor services. D) reduces the quantity demanded for their labor services while increasing the quantity supplied of their labor services. E) generates all of the above.
When your textbook says that it is misleading to say that the market economy produces an aggregate GDP-measured "economic pie," the authors have the following claim in mind:
A) Unlike a pie, income in the economy can't be divvied out independent of the exchange process. B) The economy produces more than just pies. C) The "pie" metaphor focuses solely on real GDP and excludes the more important measure of nominal GDP. D) The production of pies create no income opportunities for market participants.
Which of the following is a way to obtain endogenous growth:
A) inflation. B) human capital accumulation. C) physical capital accumulation. D) population growth.
The problems posed by special interests are unaffected by fiscal federalism
a. True b. False