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Question
Everything else held constant, if the sum of the required reserve ratio and the excess reserve ratio is greater than one, an increase in the currency-deposit ratio causes the M1 money multiplier to ________ and the money supply to ________.a. decrease; increase
b. increase; increase
c. decrease; decrease
d. increase; decrease
Answer
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Related questions
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The organization responsible for the conduct of monetary policy in the United States is the
A. Comptroller of the Currency.
B. U.S. Treasury.
C. Federal Reserve System.
D. Bureau of Monetary Affairs.
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A. balanced budgets.
B. rapidly growing money supplies.
C. falling money supplies.
D. constant money supplies.
Q:
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A. exchanges.
B. banks.
C. over-the-counter markets.
D. finance companies.
Q:
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C. have been adept at innovating in response to changes in the regulatory environment.
D. produce nothing of value and are therefore a drain on society's resources.
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Which of the followings does NOT describe the goods market in the ISLM model?
A. consumption function
B. investment function
C. government spending and tax
D. money demand function
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As bonds become a riskier asset, the demand for money ________ and, all else constant, the equilibrium interest rate ________.
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Q:
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A. IS; right
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Q:
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Q:
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B. a discretionary policy.
C. a policy rule advocated by monetarists.
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Q:
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B. the Lucas critique.
C. public choice theory.
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Q:
The Lucas critique indicates that
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Q:
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Q:
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Q:
If the economy suffers a permanent negative supply shock because there is an increase in regulations that permanently reduce the level of potential output, then
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Q:
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Q:
With the policy rate set at zero, the rise in expected inflation will lead to a ________ in the real interest
rate, which will cause investment spending and aggregate output to ________.
A. fall; rise
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Q:
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Q:
Explain and demonstrate graphically the effects of a negative supply shock in both the short-run and long-run.
Q:
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A. increase; increase
B. increase; decrease
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Q:
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A. An increase; appreciate
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Q:
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A. right; appreciate
B. right; depreciate
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