When the Fed sells government securities, the banks':
A. reserves will decrease and lending will contract, causing a decrease in the money supply.
B. reserves/deposit ratio will increase and lending will expand, causing an increase in the money supply.
C. reserves will increase and lending will expand, causing an increase in the money supply.
D. reserve requirements will increase and lending will contract, causing a decrease in the money supply.
Answer: A
You might also like to view...
Pat Robertson, a TV evangelist and former Republican Party candidate for president, once said that “debt is an affront to God,” so good Christians should not spend beyond their incomes. Indeed, Robertson wants Christians to save more. If more Americans, Christians as well as others, took his message seriously, how would we represent the result using a Keynesian macroeconomic model?
A. A downward movement along the consumption function B. An upward movement along the consumption function C. A downward shift of the consumption function D. An upward shift of the consumption function
We distinguish between the long-run aggregate supply curve and the short-run aggregate supply curve. In the long run
A) technology is fixed but it is not in the short run. B) the price level is constant but in the short run it fluctuates. C) the aggregate supply curve is horizontal while in the short run it is upward sloping. D) real GDP equals potential GDP.
The manager of Happy Chickens, an organic egg producer, should avoid all of the following topics except which one when speaking to managers of Best Eggs, a competitor firm?
A) forthcoming changes in Happy Eggs', a competitor firm's, pricing B) the planned production amounts of Happy Eggs, a competitor firm C) a new report linking egg consumption with increased heart health in adults D) Happy Chickens' planned production amounts
As long as the discount rate is ________ the interest rate on a loan, the present value of the cost of an investment equals the initial cost of the investment.
A) equal to B) less than C) exactly double D) greater than