A bank will be able to make fewer loans if it
a. sells bonds to the Fed
b. calls in loans
c. increases loans from excess reserves
d. borrows money in the federal funds market
e. buys bonds from the Fed
E
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The market demand function for wheat is Qd = 10 - 2P and the market supply function is Qs = 4P - 2, both measured in billions of bushels per year. Suppose the government wants to increase the price of wheat to $3/bushel and they impose a voluntary production reduction program to achieve their goal. How much would the government have to pay farmers?
A. $1.5 billion B. $3 billion C. $4.5 billion D. $18 billion
An increase or decrease in taxes will have a multiplier effect on equilibrium GDP on the demand side.
Answer the following statement true (T) or false (F)
Suppose that all banks maintain a 100 percent reserve ratio. If an individual deposits $ 3,000 of currency in a bank,
A. the money supply is unaffected. B. the money supply rises by more than $3,000. C. the money supply rises by less than $3,000. D. the money supply decreased by less than $3,000.
Given C = 200 + 0.75YD, the multiplier is
A. 0.75. B. 0.25. C. 4. D. 1.33.