To expand the money supply, the Fed should
A. sell U.S. government securities.
B. buy U.S. government securities.
C. cut taxes.
D. raise the required reserve ration.
Answer: B
You might also like to view...
A barter exchange
A) always takes place without greed on behalf of the trading parties. B) takes place without money. C) tends to have lower transaction costs compared to exchanges using money. D) is characterized by all of the above.
Suppose the GDP deflator in the United States is 125 and the GDP deflator in Japan is 100. Also assume the United States has trade barriers on Japanese goods in the form of quotas
What does this imply about the exchange rate of yen per dollar under the theory of purchasing power parity in the long run? A) The exchange rate of yen per dollar will be equal to 1.25. B) The exchange rate of yen per dollar will be greater than 0.8. C) The exchange rate of yen per dollar will be less than 0.8. D) The exchange rate of yen per dollar will be equal to 0.8.
Explain why choices respond to incentives and think of three incentives to which you have responded today
What will be an ideal response?
If a good is produced by firms that incur all private and external costs, the price consumers pay
A) will be efficient since it includes all social costs. B) will be too low. C) will be too high because the consumers end up paying all of the costs instead of the firm. D) will be the correct price, but inefficient.