When the Fed wishes to increase the reserves of the member banks, it
A. Raises the discount rate.
B. Sells securities.
C. Buys securities.
D. Raises the reserve requirement.
Answer: C
You might also like to view...
According to this Application, when the states got into fiscal difficulties in the 1840s through overly ambitious infrastructure projects, the federal government
A) again bailed out all the states. B) did not bail out any of the states. C) bailed out only the northern states, but not the southern states. D) only bailed out the states which comprised the original 13 colonies.
Because it has a direct effect on the hiring decisions of firms, a change in business confidence has a much larger impact on the level of economic activity than does a change in consumer confidence
Indicate whether the statement is true or false
If a competitive firm is currently producing a level of output at which profit is not maximized, then it must be true that
a. marginal revenue exceeds marginal cost. b. marginal cost exceeds marginal revenue. c. total cost exceeds total revenue. d. None of the above is correct.
A speculative bubble occurs when asset prices:
A. grow slowly because the economy is in a slump. B. grow rapidly due unrealistic expectations about further price growth. C. fall rapidly due to realistic expectations about further price declines. D. don't change because investors are uncertain about the future of the economy.