The Fed changes the reserve requirement sparingly because:
A. very small changes cause very large overall changes to money supply due to the money multiplier.
B. it would cause uncertainty for banks and slow their rate of lending.
C. sudden changes of such a huge magnitude would have far-reaching, and sometimes undesirable, effects.
D. All of these are true.
D. All of these are true.
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A consequence of increasing marginal costs of producing digital music players in Japan is
A) Japan will stop short of complete specialization in the production of digital music players. B) Japan will likely impose trade restrictions on imported digital music players. C) Japan will not export digital music players. D) Japan will import digital music players from countries that don't experience increasing marginal costs.
Many government programs, such as unemployment compensation, operate on a deficit during recessions and a surplus during periods of economic expansion. The programs are referred to as
A) discretionary fiscal policy. B) automatic stabilizers. C) Ricardian equivalence. D) Recognition time lag.
Which of the following is not affected by the level of economic activity in a country?
a. The amount spent by entrepreneurs for the installation of new machinery b. The amount spent by consumers to buy goods and services c. The amount spent by government for the provision of social security d. The amount spent by government for the expansion of roadways
Which of the following is the best explanation for why President Harry Truman once said that he wanted to find a one-armed economist?
a. President Truman received input from so many economists that he only wanted one view from each. b. President Truman thought economists should analyze policies but not make or enforce them. c. Economists understand that most policy decisions involve trade-offs so they are likely to present multiple views of policies. d. A one-armed economist would conduct only positive analysis and no normative analysis.