Which of the following statements is correct?
A) Through autonomous monetary policy adjustments the Federal Reserve can ultimately determine the equilibrium real interest rate in the long run.
B) Through autonomous monetary policy adjustments the Federal Reserve can ultimately determine potential output in the long run.
C) Through autonomous monetary policy adjustments the Federal Reserve can target any inflation rate in the long run.
D) all of the above
E) none of the above
C
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When British soldiers in German prisoner of war camps during World War I smoked the best cigarettes and used the low-quality ones as money, they were obeying
a. Gresham's law that says bad money drives out good money b. Gresham's law that says good money drives out bad money c. the classical law that says bad money drives out good money d. the classical law that says velocity affects money e. Weldon's law that says velocity affects money
If the reserve requirement is 10 percent, a bank desires to hold no excess reserves, and it receives a new deposit of $500, it
a. must increase required reserves by $50. b. will initially see reserves increase by $500. c. will be able to use this deposit to make new loans amounting to $450. d. All of the above are correct.
If the MPC in the United States was high, it would increase the value of the multiplier.
Answer the following statement true (T) or false (F)
Right-to-work laws enacted in some states prohibit
A. open shops. B. union shops. C. both open shops and union shops. D. neither open shops nor union shops.