If the Federal Reserve wishes to increase the money supply by $30,000 and the reserve requirement ratio is 0.4, how big a purchase of bonds will the Fed need to make?
a. $75,000
b. $12,000
c. $1,000
d. $30,000
e. $3,000
B
You might also like to view...
If you left $2,500 on deposit with a bank promising to pay you a 5 percent compound annual rate of interest, then after 50 years your deposit would be worth approximately:
A. $28,668 B. $11,467 C. $250,750 D. $2,625
If no fiscal policy changes are made, suppose the current aggregate demand curve will increase horizontally by $1,000 billion and cause inflation. If the marginal propensity to consume (MPC) is 0.80, federal policymakers could follow Keynesian economics and restrain inflation by decreasing:
a. government spending by $200 billion. b. taxes by $100 billion. c. taxes by $1,000 billion. d. government spending by $1,000 billion.
Value-creating contracts require underlying laws that:
a. clearly define the rights and obligations of the parties. b. discriminate between the rights of the different income groups. c. describe the final distribution of rights among the transacting parties. d. create equal distribution of wealth.
If external benefits exist:
A.) The market will overproduce the good. B.) Private demand will exceed social demand. C.) Market demand will understate social demand. D.) The market will generate the optimal outcome.