The discount rate cannot be used to control the money supply with great precision because its effects on banks' demand for reserves are uncertain.
Answer the following statement true (T) or false (F)
True
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An increase in price is likely to affect demand in what way?
A. Demand will increase. B. Demand will decrease. C. Demand will not change. D. This would only affect supply and not demand.
Kedran is indifferent between option A, which gives her $10,000 for sure, and option B, which gives her $5,000 with probability 0.4 or $15,000 with probability 0.6. Kedran's cost of risk for option B is
A) zero. B) $1,000. C) $5,000. D) $10,000.
What are the costs of capital mobility?
What will be an ideal response?
If the price level increases in the United States relative to foreign countries, then American consumers will purchase more foreign goods and fewer U.S. goods. This statement describes:
A. the output effect. B. the foreign purchases effect. C. the real-balances effect. D. the shift-of-spending effect.