An increase in Treasury deposits at the Fed causes
A) the monetary base to increase.
B) the monetary base to decrease.
C) Fed assets to increase but has no effect on the monetary base.
D) Fed assets to decrease but has no effect on the monetary base.
B
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The production possibilities curve is bowed outward from the origin because of
a. the law of increasing costs b. the finite nature of the resource base c. inefficiency d. improper output mix e. unemployment
Causality (what causes what) is clear and mechanical with the quantity theory of money. If M increases, with
a. V and Q being variable, the price level, P, increases b. V and Q being variable, the price level, P, decreases c. V and Q being constant, the price level, P, increases d. V and Q being constant, the price level, P, decreases e. P and Q being constant, velocity, V, increases