The purchase of $1 million of Treasury securities by the Federal Reserve, if there is no change in the quantity of currency, will cause reserves at banks to
A) increase by $1 million. B) decrease by less than $1 million.
C) decrease by $1 million. D) increase by less than $1 million.
A
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A classical objection to Keynesian sticky price models is that
A) it is easier for firms to change prices rather than change output. B) it is cheaper for firms to change output rather than change prices. C) sticky price models are internally inconsistent. D) real shocks are more important than nominal shocks.
Data from the Bureau of Labor Statistics show that the largest category of consumer spending is housing
a. True b. False Indicate whether the statement is true or false
A reduction in the real interest rate will increase investment spending, other things equal, because firms will make an investment purchase if the expected return is
What will be an ideal response?
Which best describes money as a means of payment?
A. To obtain a double coincidence of wants without money is impossible. B. Money provides an immediate double coincidence of wants. C. Money requires at least two transactions to obtain the double coincidence of wants. D. Money makes sure a double coincidence of wants never occurs.