The Federal Reserve wants to reduce the nation's money supply. This could be accomplished by doing all of the following EXCEPT
A. decreasing the discount rate.
B. increasing the reserve requirement.
C. selling securities on the open market.
D. making banks hold a reserve for all types of deposits.
Ans: A. decreasing the discount rate.
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If the social benefit is greater than the private benefit in a particular market, then the private equilibrium will be at a quantity:
A. equal to the socially optimal level. B. greater than or less than the socially optimum level, depending on the size of the external costs. C. greater than the socially optimal level. D. less than the socially optimal level.
Using the vertical long-run aggregate supply curve, an increase in the aggregate demand for an economy would have which of the following effects in the long-run?
A) An increase in government spending to shift aggregate demand to the right. B) An increase in aggregate output and a rise in the price level. C) No change in aggregate output and a fall in the price level. D) No change in aggregate output and a rise in the price level.
Assets of the commercial banking system include
A. loans and deposits. B. deposits. C. reserves and loans. D. reserves and deposits.
All of the following can be used to measure macroeconomic performance except for the
A. International value of the dollar. B. Total real value of goods and services produced. C. Growth rate of the population. D. Average price level of goods and services.