A change in the reserve requirement is used infrequently by the Fed because it:
A. is disruptive to the banking system.
B. does not influence the money supply.
C. does not affect bank reserves.
D. does not affect the money multiplier.
Answer: A
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In 2014, the price of peanuts was rising, which lead peanut butter sellers and peanut butter buyers to expect the price of peanut butter would rise in the future. Suppose the effect on the buyers was larger than the effect on the sellers
Consequently, in the current market for peanut butter there is a ________ in the price of peanut butter and ________ in the quantity of peanut butter. A) rise; an increase B) rise; a decrease C) fall; a decrease D) fall; an increase
Which of the following situations is one in which the Fed will potentially pursue expansionary monetary policy?
A) Aggregate demand is growing too fast to keep the economy at full employment. B) Potential GDP is forecasted to be lower than equilibrium GDP. C) Potential GDP is forecasted to be higher than equilibrium GDP. D) Aggregate demand is growing too slowly and the economy is in danger of producing GDP above full employment.
Credit cards are a popular means of payment. Why are credit card accounts not included in M1 or M2? Are credit cards of no relevance to these money measures?
What will be an ideal response?
Opportunity cost includes
A. only the actual amount spent on a choice. B. the value of foregone actions but not dollar outlays. C. the value of foregone options plus the dollar outlays associated with a choice. D. the amount you are paid to select an opportunity.