Which of the following actions of the Fed would increase the money supply?
a. The purchase of U.S. government securities.
b. A reduction in the discount rate.
c. A reduction in the required reserve ratio.
d. All of the above are correct.
D
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When deriving an Engel curve, if the optimum point for good X lies to the left as income increases, good X is
a. a normal good. b. an inferior good. c. a Giffen good. d. a substitute for good Y.
Which of the following would cause a rightward shift of the supply curve for cell-phone services?
A. a decrease in price of cell-phones B. an increase in price of cell-phones C. a subsidy to cell-phone producers D. a tax on cell-phone producers
The Fed has attempted to solve the problems of being unable to directly control the variables that determine economic performance and the timing lags in observing and reacting to economic fluctuations by
A) pressing Congress for legislation which would expand its powers. B) using targets to meet its goals. C) abandoning some goals in order to achieve others. D) devising new monetary policy tools.
Because every transaction has a buyer and a seller,
a. GDP is more closely associated with an economy's income than it is with an economy's expenditure. b. every transaction contributes equally to an economy's income and to its expenditure. c. the number of firms must be equal to the number of households in a simple circular-flow diagram. d. firms' profits are necessarily zero in a simple circular-flow diagram.