Which of the following tools is used most often by the Fed for changing the supply of money?
A. Interest rate
B. Discount window
C. Open market operations
D. Reserve requirement
Answer: C
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The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in
a. opinions and education. b. opinions and values. c. scientific judgments and education. d. scientific judgments and values.
An increase in the price of a good would
a. increase the supply of the good. b. increase the amount purchased by buyers. c. give producers an incentive to produce more. d. decrease both the quantity demanded of the good and the quantity supplied of the good.
If there is an inflationary gap, then a 45-degree line exceeds the aggregate expenditure curve at the full-employment level of income.
Answer the following statement true (T) or false (F)
When aggregate economic activity is declining, the economy is said to be in
A. a trough. B. an expansion. C. a contraction. D. a turning point.