If the Fed buys $32 billion of U.S. bonds in the open market and the reserve requirement is 10 percent, M1 will eventually
A. Decrease by $320 billion.
B. Increase by $32 billion.
C. Decrease by $32 billion.
D. Increase by $320 billion.
Answer: D
You might also like to view...
Which of the following statements about affirmative action programs that provide is accurate?
When a shortage of a goods leads to a price increase, its price usually rises because
A) Americans are committed to capitalism. B) most people are better off if it does. C) sellers can benefit by raising their prices. D) higher prices lead to scarce goods being allocated most efficiently.
Each person who is 16 years or older is considered to be in one of the following categories:
A. employed, unemployed, or discouraged worker. B. employed, unemployed, or out of the labor force. C. part-time worker, full-time worker, or unemployed. D. part-time worker, full-time worker, or out of the labor force.
When the price of DVDs falls relative to movie and restaurant prices, and consumers buy more of the DVDs, economists call this
A) indifference. B) satisfaction. C) marginalization. D) substitution.