Everything else remaining unchanged, if the demand curve for reserves shifts to the left and borrowed reserves is zero:
A) there will be a decrease in both the federal funds rate and the quantity of reserves.
B) there will be a decrease in the federal funds rate but no change in the quantity of reserves.
C) there will be an increase in the federal funds rate but no change in the quantity of reserves.
D) there will be an increase in both the federal funds rate and the quantity of reserves.
B
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Real business cycle theory emphasizes the role of
A) government spending as a cause of economic fluctuations. B) shocks to the money supply as a cause of economic fluctuations. C) demand shocks as a cause of economic fluctuations. D) technology shocks as a cause of economic fluctuations.
When the interest rate changes,
A) the demand curve for bonds shifts to the right. B) the demand curve for bonds shifts to the left. C) the supply curve for bonds shifts to the right. D) it is because either the demand or the supply curve has shifted.
Adverse selection occurs when
A) a person takes more risks that are not known to the life insurance company because he has life insurance. B) a person buys life insurance because he has a risky lifestyle that is not known to the life insurance company. C) a person is a risk lover. D) pregnant women with health insurance make more doctor visits than uninsured pregnant women.
Say's law promises that each and every firm in the economy will be able to sell all of the particular output it produces
a. True b. False