An open-market purchase of government securities by the Fed will:
A. increase bank reserves, and the money supply will increase.
B. increase bank reserves, and the money supply will decrease.
C. decrease bank reserves, and the money supply will decrease.
D. decrease bank reserves, and the money supply will increase.
Answer: A
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A scatter diagram with the price of vacations to Mexico on the vertical axis and the price of vacations to California on the horizontal axis shows a positive relationship
If the price of vacations to Mexico were placed on the horizontal axis, and the price of vacations to California on the vertical axis, the relationship would be A) negative relationship, also called a direct relationship. B) negative relationship, also called an inverse relationship. C) positive relationship, also called a direct relationship. D) positive relationship, also called an inverse relationship.
If planned aggregate expenditure is less than total production
A) the economy is in equilibrium. B) GDP will increase. C) actual inventories will equal planned inventories. D) firms will experience an unplanned increase in inventories.
The international capital market is:
A) the international currency exchange. B) a market in which capital assets are exchanged for services. C) the market that is subject to intense regulation and must file a report to the Basel committee on a biannual basis. D) not really a single market, but a group of closely interconnected markets in which asset exchanges with some international dimension take place. E) an organization of fiscal policies that dictate international trade.
If there is an unanticipated increase in aggregate demand, which of the following is most likely to occur?
a. a reduction in the price level b. an increase in the rate of unemployment c. an increase in employment d. an expansion in the federal budget deficit