The non-bank public chooses among various financial assets in deciding what kind of liquidity it wants to hold. It thereby increases or decreases
A) the narrowly-defined money stock (M1).
B) the reserves of commercial banks.
C) the reserves commercial banks are required to hold.
D) all of the above, at least potentially.
E) none of the above, since only the Fed can alter the money supply.
D
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In general, a fine on selling a product leads to the
A) supply curve shifting rightward. B) supply curve shifting leftward. C) demand curve shifting rightward. D) demand curve shifting leftward.
An external cost, such as the cost generated by pollution, is
A) a cost paid by consumers of the product. B) a cost paid by producers of the product. C) a cost paid by a third party or by society at large. D) not a true opportunity cost of production.
Which of the following statements is an accurate statement about the Social Security (OASDI) program?
A) The program is financed by voluntary contributions. B) Only 50 percent of workers are covered by OASDI. C) Benefits are based on financial need. D) The program transfers income from those who work to those who do not work.
Economists Novy-Marx and Rauh contend that if Chicago wanted to adequately fund its pension systems for its public workers, it would have to put on
A. a one-time tax of nearly $42,000 per household. B. an annual tax of only $42 per household. C. an annual tax of nearly $42,000 per household. D. a one-time tax of nearly $420,000 per household.