The monetary base declines when
A) the Fed extends discount loans.
B) Treasury deposits at the Fed decrease.
C) float increases.
D) the Fed sells securities.
D
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Banks who held mortgage-backed securities "took a bath" during the financial crisis of 2007-2009 due to:
A) rising yields in secondary markets which led to a decline in the price of mortgage-backed securities. B) falling yields in secondary markets which led to a decline in the price of mortgage-backed securities. C) their inability to issue new mortgages. D) more rapid pre-payment of mortgages.
Refer to the diagram, where T is tax revenues and G is government expenditures. All figures are in billions of dollars. If the full-employment GDP is $400 billion while the actual GDP is $200 billion, the cyclically adjusted budget deficit is:
A. $40 billion.
B. zero.
C. $60 billion.
D. $20 billion.