Which of the following are tools used by the Fed to implement monetary policy?
A. Printing Federal Reserve notes
B. Open market operations
C. Minting coins
D. Regulating banks activities
B. Open market operations
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Suppose the government wants to maintain a balanced budget. To achieve this goal, when the economy falls into recession government would need to ________ taxes, which would cause aggregate demand to ________
A) decrease; decrease B) increase; increase C) increase; decrease D) decrease; increase
Capital and labor are distinct from technology since ________
A) technology is exogenous B) technology is rival in its use C) capital and labor are physical things D) technology is a physical thing
Which of the following asset would be considered money?
A. An asset that has value and could at some time be accessed in order to make transactions. B. An asset that can be bought or sold using a widely-used means of payment. C. An asset that can be easily converted into a widely-used means of payment with little loss in value. D. An asset that is infrequently used as a means of payment. Correct. For this reason, savings accounts and money market mutual funds are usually counted as money.
The purchase of $1 million of Treasury securities by the Federal Reserve, if there is no change in the quantity of currency, will cause reserves at banks to
A) increase by $1 million. B) increase by less than $1 million. C) decrease by $1 million. D) decrease by less than $1 million.