If the Fed wishes to maintain its interest rate target in the face of decreased money demand it would likely
a. increase the money supply.
b. decrease the money supply.
c. more stringently enforce already existing banking regulations.
d. propose new banking regulations.
e. become more lax when it enforces already existing banking regulations.
B
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Jane's utility function is represented as: U = F0.5 C0.5, F is quantity of food and C is quantity of clothing. If her budget constraint is represented as: 120 = 2F + C, her optimal bundle of consumption should be
A) (40F, 40C). B) (20F, 60C). C) (50F, 50C). D) (45F, 20C).
Adverse selection is more likely when
a. a job requires specific training b. a job requires intangible or unmeasurable abilities c. the wage offered is above the average of all wages in the market d. the wage is based on true marginal revenue products e. performance can be monitored closely
A price-discriminating monopolist will make less in profit than will one that does not price-discriminate.
Answer the following statement true (T) or false (F)
An expansionary monetary policy is most likely to produce an inflationary effect with little impact on output when the economy
A. is near full employment and the aggregate supply curve is horizontal. B. is near full employment and the aggregate supply curve is vertical. C. has substantial unemployment and the aggregate supply curve is vertical. D. has substantial unemployment and the aggregate supply curve is horizontal.