In December 1999 people feared that there might be computer problems at banks as the century changed. Consequently, people wanted to hold relatively more in currency and relatively less in deposits. In anticipation banks raised their reserve ratios to have enough cash on hand to meet depositors' demands. These actions by the public
a. would increase the multiplier. If the Fed wanted to offset the effect of this on the size of the money supply, it could have sold bonds.
b. would increase the multiplier. If the Fed wanted to offset the effect of this on the size of the money supply, it could have bought bonds.
c. would reduce the multiplier. If the Fed wanted to offset the effect of this on the size of the money supply, it could have sold bonds.
d. would reduce the multiplier. If the Fed wanted to offset the effect of this on the size of the money supply, it could have bought bonds.
d
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When the interest rate rises
A) planned investment falls. B) planned investment rises. C) planned investment will be unaffected. D) equilibrium income increases.
The common factors that give rise to all principal-agent problems include the
a. unobservability of some manager-agent action b. presence of random disturbances in team production c. the greater number of agents relative to the number of principals d. a and b only e. none of the above
When the economy is on operating beyond the natural rate of real output, efforts to bring inflation down with monetary policy will be ____ successful and efforts to stimulate the economy will be ____ successful
a. More; less b. More; more c. Less; less d. Less; more
Inflation that occurs when total spending is greater than the economy's ability to produce output at the existing price level is:
A. demand-pull inflation. B. cost-push inflation. C. unanticipated inflation. D. anticipated inflation.