Suppose banks decide to hold more excess reserves relative to deposits. Other things the same, this action will cause the
a. money supply to fall. To reduce the impact of this the Fed could lower the discount rate.
b. money supply to fall. To reduce the impact of this the Fed could raise the discount rate.
c. money supply to rise. To reduce the impact of this the Fed could lower the discount rate.
d. money supply to rise. To reduce the impact of this the Fed could raise the discount rate.
a
You might also like to view...
Beth can earn $7,500 by renting out her house. However, her neighbor keeps a pet dog that chases away whoever comes looking for the house. Because her neighbor has a right to keep his pet untied, Beth is unable to find a tenant
What is the efficient outcome in this case if her neighbor values keeping his pet free for $1,500?
Labor market compensation contracts can be designed to screen out poor quality workers as well as provide employees with incentives to work hard.
Answer the following statement true (T) or false (F)
If a 20% change in price results in a 15% change in quantity supplied, then the price elasticity of supply is about
a. 1.33, and supply is elastic. b. 1.33, and supply is inelastic. c. 0.75, and supply is elastic. d. 0.75, and supply is inelastic.
Use the following diagram to answer the next question.
The phases of the business cycle from points A to D are, respectively
A. expansion, recession, trough, peak. B. trough, recovery, expansion, peak. C. peak, recession, expansion, trough. D. peak, recession, trough, expansion.