The Federal Reserve System controls the money supply by ________.
A. making loans to private borrowers
B. changing the amount of reserves the banking system has available
C. making loans to the Treasury
D. issuing currency
Answer: B
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Last year in the country of Union, the price level increased and real GDP increased. Such an outcome might have occurred because short-run aggregate supply ________ and aggregate demand ________
A) decreased; decreased B) increased; did not change C) increased; decreased D) did not change; increased
Tariffs contribute to higher prices of textile products imported into the United States, but import quotas on textiles brought into the United States do not
a. True b. False Indicate whether the statement is true or false
Which of the following is true? a. U.S. imports are considered a credit item in the balance of payment, because the dollars sold to buy the necessary foreign currency add to foreign claims against U.S. buyers. b. When the U.S. runs a trade deficit in goods and services with the rest of the world, the rest of the world must be running a trade surplus in goods and services with the U.S. c. When
the U.S. runs a trade deficit in goods, it must run a trade surplus in services. d. None of the above is true.
When the economy goes into a downturn what automatic stabilizer limits the downturn?
a. decreased tax revenue b. increased military spending c. increased unemployment benefits d. decreased inflation rate