Which of the following is correct?
a. The Fed can control the money supply precisely.
b. The amount of money in the economy does not depend on the behavior of depositors.
c. The amount of money in the economy depends in part on the behavior of banks.
d. None of the above is correct.
c
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The real price trendline for non fuel primary commodities from 1960-2005 has been
(a) Unchanged (b) Steadily increasing (c) Steadily decreasing (d) First decreased and then increased.
If increasing returns to scale are present, the long-run average cost increases as more output is produced
Indicate whether the statement is true or false
All of the following are shortcomings of GDP as a measure to human well-being except it:
a. Excludes black market and underground transactions. b. Excludes quality improvements that do not increase price or quantity sold. c. Excludes the value of leisure time. d. Counts harmful and dangerous output the same as useful output. e. Excludes international transactions.
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and current international transactions in the context of the Three-Sector-Model?
a. The real risk-free interest rate rises, and current international transactions become more positive (or less negative). b. The real risk-free interest rate falls, and current international transactions become more negative (or less positive). c. The real risk-free interest rate and current international transactions remain the same. d. The real risk-free interest rate rises, and current international transactions become more negative (or less positive). e. The real risk-free interest rate rises, and current international transactions remain the same.