The reserve requirement is 4 percent, banks hold no excess reserves and people hold no currency. If the Fed sells $10,000 worth of bonds, what happens to the money supply?
a. it increases by $250,000
b. it increases by $200,000
c. it decreases by $200,000
d. it decreases by $250,000
d
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Which of the following federal agencies is NOT engaged in economic regulation?
A) the Federal Reserve B) Federal Aviation Administration C) Food and Drug Administration D) Federal Deposit Insurance Corporation
In many cities, the market for cab services is monopolized. This monopoly arises because:
a. of economies of scale. b. of government restrictions on the entry of new firms. c. there is a limited space on the streets for taxis. d. it protects the consumers from unscrupulous drivers. e. of high fixed costs of entering the business.
In thinking about the criteria for an ideal voting system, unanimity means if:
A. the median in the group prefers option X to option Y, then X beats Y. B. the majority of the group prefers option X to option Y, then X beats Y. C. no one in the group prefers option X to option Y, then it must still be possible for X to beat Y. D. everyone in the group prefers option X to option Y, then X beats Y.
A likely consequence over time of an average-cost pricing policy for a natural monopoly is:
A. an increase in the average cost curve. B. an increase in profits. C. no change in price. D. a decrease in the average cost curve.