When the Federal Reserve sells government bonds to the public, it:
a. increases the M1 money supply and increases the reserves of the commercial banking system.
b. increases the M1 money supply, while reducing the reserves of the commercial banking system.
c. reduces the M1 money supply, while increasing the reserves of the commercial banking system.
d. reduces the M1 money supply and decreases the reserves of the commercial banking system.
d
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Everything else remaining unchanged, what is likely to happen to the equilibrium real interest rate and quantity of credit if the credit supply curve shifts to the right?
A) The equilibrium rate of interest will increase and the quantity of credit will decrease. B) The equilibrium rate of interest will decrease and the quantity of credit will increase. C) Both equilibrium rate of interest and quantity of credit will increase. D) Both equilibrium rate of interest and quantity of credit will decrease.
The table shows the distribution of human and non-human capital for two people, Sam and Janet
a) Looking just at tangible assets (non-human capital), by how many times does Janet's wealth exceed Sam's? b) Assume that both human and non-human capital earn a 10 percent annual interest rate. Calculate Sam's and Janet's total income. c) By how many times does Janet's total income exceed Sam's? d) Which comparison results in a more equal distribution? e) Which comparison gives a better indication of each person's economic condition?
In the long run, a country's exchange rate is determined by:
A. supply and demand. B. domestic monetary. C. purchasing power parity. D. the domestic inflation rate.
Table 9.1Disposable IncomeTotal Consumption(Billions of dollars per year)(Billions of dollars per year)$0$50200210What is the rate of saving when income equals $300 billion in Table 9.1?
A. -$290 billion. B. $10 billion. C. Zero. D. $50 billion.