Which of the following is correct?
a. Federal Reserve purchases of securities will increase the reserves available to commercial banks.
b. Federal Reserve purchases of securities exert upward pressure on interest rates in the short run.
c. The Federal Reserve System determines the ratio of currency held by the public to the money supply (M1).
d. Federal Reserve purchases of securities will decrease the reserves available to commercial banks.
A
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The equation of exchange ________
A) states that the quantity of money multiplied by velocity must equal nominal income in a given year B) describes a relationship that is true by definition C) shows that real GDP must equal real money balances times the number of times a dollar turns over in a year D) all of the above E) none of the above
"Crowding out" refers to federal government deficits financed by:
a. borrowing which increases interest rates and thereby reduces private spending. b. increasing taxes which reduces private spending. c. the federal government buying foreign debt which reduces the amount of government spending and government programs. d. reducing government spending which reduces interest rates.
A bond with a high yield
a. gives investors a high return on their investments. b. gives investors a low return on their investments. c. sells for a high price. d. sells for a low price.
Roxanne's hourly wage increases from $9 to $13 . Which of the following describes a consequence of the increase in Roxanne's wage?
a. The opportunity cost of Roxanne's leisure time has increased. b. Roxanne may choose to work fewer hours due to the increase in her wage. c. If Roxanne's labor supply curve is upward sloping, she will choose to work fewer hours. d. Both a and b are correct.