When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand
B. increase; raise; decline
C. decline; lower; decline
D. decline; raise; decline
Answer: B
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Suppose you plan to hold a stock for one year. You expect that, in one year, it will sell for $30 and pay a dividend of $3 per share. If your required return on equity is 10%, what is the most you should be willing to pay for the share today?
A) $3.30 B) $23 C) $30 D) $33
The money multiplier
A) equals 1 over the required reserve ratio. B) is an expression that converts the monetary base to the money supply. C) is larger than the simple deposit multiplier. D) is completely controlled by the Fed.
If the monetary base doubles but the ratios of currency/deposit and reserves/deposits remain the same, then:
a. The money supply doubles. b. The money supply quandrouples. c. The money supply changes by two times the money multiplier. d. The money supply remains unchanged.
The purchase of the assets of one steelmaker by another steelmaker might be a violation of the:
a. Clayton Act. b. Federal Trade Commission Act. c. Celler-Kefauver Act. d. Robinson-Patman Act.