If the FOMC orders the sale of T-bills in the open market, then bank reserves are
a. decreased, but the money supply will remain unchanged.
b. decreased, and a multiple contraction of the money supply will occur.
c. increased, but the money supply will remain unchanged.
d. increased, and a multiple expansion of the money supply will occur.
b
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The chain-weighted index for GDP and the CPI differ in that the CPI
A) asks how much a fixed basket of goods costs in the current year as compared to the cost of those same goods in a base year while the chain-weighted index takes an average of price changes using base years from neighboring years. B) excludes price changes from used and imported goods while the chain-weighted index includes these price changes. C) is calculated by the Commerce Department while the chain-weighted index is calculated by local newspapers. D) is calculated in nominal terms and the chain-weighted index is calculated in real terms.
The nation's supply of productive resources increases if
A) investment is greater than depreciation. B) investment equals depreciation. C) investment is less than depreciation. D) Both answers A and B can be correct. E) None of the above answers is correct because the relationship between investment and depreciation has no bearing on the amount of the nation's productive resources.