If you were the Chairman of the Fed and faced a recession, you would most likely
a. increase commercial bank reserves by raising the discount rate
b. increase commercial bank reserves by buying government securities
c. decrease commercial bank reserves by raising the discount rate
d. decrease commercial bank reserves by selling government securities
e. decrease commercial bank reserves by lowering the legal reserve requirement
B
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What is the difference between directly holding stock in a company like Apple and investing in a mutual fund that holds Apple stock?
What will be an ideal response?
Inventory changes (that is, goods produced but not sold) are important in calculating GDP because
a. they are the least volatile component of investment b. these changes mean the economy has extra goods available for purchase c. they are an example of transfer payments d. GDP includes all possible sources for goods and services e. we want to measure all current production when computing GDP
Higher interest rates in Iceland and the Baltic states in 2008-2009 were necessary to protect the value of their currencies against capital flight
a. True b. False Indicate whether the statement is true or false
In the short run, an increase in the money supply causes interest rates to
a. increase, and aggregate demand to shift right. b. increase, and aggregate demand to shift left. c. decrease, and aggregate demand to shift right. d. decrease, and aggregate demand to shift left.