If the Fed lowers the reserve requirement, then this
A) increases excess reserves, encourages banks to make more loans, and increases the money supply.
B) decreases excess reserves, causes banks to reduce their loans, and decreases the money supply.
C) decreases excess reserves, causes banks to reduce their loans, and increases the money supply.
D) increases excess reserves, causes banks to reduce their loans, and increases the money supply.
Answer: A
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When the U.S. dollar rises in value relative to the Mexican peso, the dollar has ________, and when the dollar falls in value, it has ________
A) grown; shrunk B) grown; shrunken C) been bullish; been bearish D) depreciated; appreciated E) appreciated; depreciated
Suppose the United States spends more on foreign goods and services than foreigners spend on our goods and services and the United States sells no foreign assets. Then the
A) United States must borrow an amount equal to national saving. B) United States must borrow an amount equal to imports minus exports. C) rest of the world may or may not finance the U.S. trade deficit. D) United States must borrow an amount equal to consumption expenditure plus investment.