How can the Fed increase the money supply? How can the Fed decrease the money supply? Be specific
To increase the money supply the Fed should buy U.S. government securities on the open market, reduce the discount rate and/or reduce the required reserve ratio. Do the opposite to decrease the money supply.
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Deliberate actions by a central bank to influence the exchange rate are known as
A) current account actions. B) foreign-exchange market interventions. C) dollar-value operations. D) foreign-commerce maneuvers.
A tax of $0.25 is imposed on each bag of potato chips that is sold. The tax decreases producer surplus by $600 per day, generates tax revenue of $1,220 per day, and decreases the equilibrium quantity of potato chips by 120 bags per day. The tax
a. decreases consumer surplus by $645 per day. b. decreases the equilibrium quantity from 6,000 bags per day to 5,880 bags per day. c. decreases total surplus from $3,000 to $1,800 per day. d. creates a deadweight loss of $15 per day.
The value of net exports is:
A. exports -imports. B. (exports + imports) -tariffs. C. exports + imports. D. imports -exports.
The Federal Reserve has just purchased bonds in the market, carrying out open market operations. In the short run in the Keynesian model, this would cause the foreign real interest rate to ________ and foreign output to ________.
A. decrease; decrease B. increase; increase C. increase; decrease D. decrease; increase