Which of the following is the most frequently used tool of monetary policy?
A. Changing the discount rate
B. Changing reserve requirements
C. Open-market operations
D. Interest rate changes
Answer: C
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The smaller the amount of short-term money invested in a country, the greater the potential for a crisis if investors lose confidence in the country
a. True b. False Indicate whether the statement is true or false
What would be the likely result of a recessionary gap? If this leads to a fall in the nominal wage what impact it would have on the aggregate supply curve and on recessionary gap?
In the 19th century, when crop failures often led to bank runs, banks would make relatively fewer loans and hold relatively more excess reserves. By itself, these actions by the banks should have
a. increased the money multiplier and the money supply. b. decreased the money multiplier and increased the money supply. c. increased the money multiplier and decreased the money supply. d. decreased both the money multiplier and the money supply.
Economic rents can lead to large wage differentials.
Answer the following statement true (T) or false (F)