The situation in which the central bank increases the money supply, but the money multiplier falls enough to offset increases in reserves is known as a:
A. reserve trap.
B. interest rate trap.
C. Fed trap.
D. liquidity trap.
Answer: D
You might also like to view...
Gasoline taxes that are typically used for highway construction and maintenance are consistent with which of the following principles of taxation?
A) the ability-to-pay principle B) the vertical-equity principle C) the horizontal-equity principle D) the benefits-received principle
An example of a negative externality is: a. the benefit you receive when your neighbor installs a smoke detector
b. the reduction in profits for your company that occurs when there is a decrease in consumer demand for the product you manufacture. c. the sleep you lose when your neighbor throws a loud party next door that keeps you awake. d. the change in the property values of your neighbors' homes when you paint your house and landscape your front yard
Which of the following statements is correct?
a. The poverty line is a relative standard. b. More families are pushed above the poverty line as economic growth pushes the entire income distribution upward. c. Increasing income inequality reduces poverty. d. Economic growth, by definition, affects all families equally.
Which of the following is a positive economic statement?
A) Policymakers should strive to eliminate government budget deficits. B) The President of the United States should promote high employment growth in the United States. C) If the price of eggs increases, the quantity demanded of eggs will fall. D) We should try to eliminate poverty in the United States.