Which of the following actions by the Fed would increase the money supply?
A. reducing the required reserve ratio
B. selling government bonds in the open market
C. increasing the discount rate
D. increasing the income tax rate
Answer: A
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Financial capital
A) depends on saving and borrowing decisions. B) is accumulated investment. C) depreciates each year. D) is another name for the machines and tools that businesses buy. E) is independent of physical capital.
The Friedman—Phelps analysis shows that a negative relationship between inflation and unemployment holds
A) even when expected inflation changes. B) even when the natural rate of unemployment changes. C) even if both the expected inflation rate and the natural rate of unemployment change. D) as long as the expected inflation rate and the natural rate of unemployment are approximately constant.
If a laborer in Mexico can produce 2 bushels of wheat or 4 bushels of corn in a day, the opportunity cost of producing wheat is 4 bushels of corn
a. True b. False Indicate whether the statement is true or false
If a good has a perfectly inelastic short-run supply curve, an increase in demand will: a. increase the price and quantity exchanged in the short run
b. increase the price and but leave the quantity exchanged the same in the short run. c. increase the quantity exchanged but leave the price the same in the short run. d. leave both price and quantity exchanged the same in the short run.