If the Fed sells $5 billion of U.S. bonds in the open market and the reserve requirement is 5 percent, M1 will eventually
A. Increase by $100 billion.
B. Decrease by $25 billion.
C. Decrease by $100 billion.
D. Increase by $25 billion.
Answer: C
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A U.S. firm produces nail guns in the first quarter of 2010 and adds them to its inventory. In the second quarter of 2010 the firm sells the nail guns to a U.S. construction company. In which quarter(s) does(do) these transactions raise investment?
a. the first and the second b. the first but not the second c. the second but not the first d. neither the first nor the second
Suppose that production for good X is characterized by the following production function, Q = K0.5L0.5, where K is the fixed input in the short run. If the per-unit rental rate of capital, r, is $86.80 and the per-unit wage, w, is $20, then the average total cost of using 25 units of capital and 49 units of labor is:
A. $5. B. $90. C. $75. D. There is insufficient information to determine the average total costs.
When there is an increase in aggregate demand in the long run, there will be an increase in the price level but not in the level of output or employment.
Answer the following statement true (T) or false (F)
The highest-valued alternative that must be given up to engage in an activity is the definition of
A) utility. B) implicit cost. C) opportunity cost. D) economic sacrifice.