If the Fed decreases the required reserve ratio at a time when banks are holding no excess reserves, the Fed is:
a. forcing banks to increase the money supply
b. forcing banks to decrease the money supply.
c. making it possible for banks to increase the money supply but not forcing them to do so.
d. making it possible for banks to decrease the money supply but not forcing them to do so.
e. conducting open market operations but not changing the money supply.
c
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The only way that consumption can be taxed is through a general sales tax
a. True b. False
The term "ceteris paribus" means that: a. everything is variable
b. all variables except those specified are constant. c. no one knows which variables will change and which will remain constant. d. what is true for the individual is not necessarily true for the whole.
According to the classical dichotomy, what changes nominal variables? What changes real variables?
Which of the following does not help to explain why politicians might hesitate to balance the budget in an election year?
A. The inflation rate might rise. B. The economy could be pushed into recession. C. Many people might lose income transfers. D. Voters might become unemployed.