Suppose that during a period of inflation, the Fed reduced its holdings of U.S. securities from $600 billion to $580 billion. This indicates that the Fed was
a. seeking to reduce the money supply to decrease inflation.
b. trying to force Congress to decrease taxes.
c. expanding the money supply and stimulating employment.
d. expanding the money supply, even though the existing inflation suggested a restrictive policy would be more appropriate.
A
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What do sellers do if they expect the price of goods they have for sale to increase dramatically in the near future?
What will be an ideal response?
Consumers tend to accept the market restrictions imposed by suppliers because:
A. government prevents them from organizing. B. their costs of organizing are higher than the cost of the collusion by the suppliers. C. they see themselves as laborers and therefore benefit from restrictions. D. when combined, their losses are small for the group as a whole.
In the case of a linear demand curve, demand becomes more price elastic as price increases
Indicate whether the statement is true or false
An easing of monetary policy should:
A. increase investment and household spending but lower net exports. B. increase spending by households and businesses and increase net exports. C. raise net exports but lower spending by households and businesses. D. decrease spending by households and businesses as well as net exports.