If the Fed wanted to expand the money supply as part of an antirecession strategy, it could
a. increase the reserve requirements imposed on commercial banks.
b. decrease the interest rate paid on excess reserves encouraging banks to extend more loans.
c. sell U.S. government securities and other financial assets that it is currently holding.
d. raise the interest rate on loans extended to banks and other financial institutions.
B
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Contractual savings institutions include
A) mutual savings banks. B) money market mutual funds. C) commercial banks. D) life insurance companies.
The output level at which a firm's long-run average total cost is minimized is known as its
a. profit-maximizing output level b. long-run marginal cost c. minimum efficient scale d. revenue maximization level e. equilibrium cost structure
Positive economic principles are those that:
A. predict how people will behave. B. are influenced by political ideology. C. are always correct. D. indicate how people should behave.
If a government wants to pursue an expansionary fiscal policy, then a tax cut of a certain size will be more expansionary when the:
A. Economy's MPS is small B. Economy's MPS is large C. Economy's MPC is small D. Unemployment rate is low