Which of the following tools is used most often by the Fed for changing the supply of money?
A. Open market operations
B. Reserve requirement
C. Discount window
D. Interest rate
A. Open market operations
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Explain the paradox of value
What will be an ideal response?
When economists say the quantity supplied of a product has increased, they mean the:
a. supply curve has shifted to the left. b. supply curve has shifted to the right. c. price of the product has risen, and consequently, suppliers are producing more of it. d. price of the product has fallen, and consequently, suppliers are producing less of it.
Inferior goods have negative income elasticities
a. True b. False Indicate whether the statement is true or false
If the government purchases multiplier is 4 and a change in government spending leads to a $500 million decrease in aggregate demand, we can conclude that
A. Government spending decreased by $125 million. B. Taxes increased by $500 million. C. Government spending decreased by $100 million. D. Taxes decreased by $100 million.