Assume that the M1 multiplier is 2.5. If the Federal Reserve purchases $200 worth of government securities, the money supply will
A) rise by $200.
B) rise by $500.
C) fall by $200.
D) fall by $500.
B
Economics
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What would be a way for the Federal Reserve to slow down the economy when it is growing too quickly or is inflationary?
A) print more money B) encourage the stock market C) sell more government bonds D) buy back government bonds on the open market
Economics
Based on Figure 6.1, suppose the government puts a tariff of $0.25 per bushel on soybean imports. How much will the tariff reduce imports?
A) Imports will decrease by 10 million bushels. B) Imports will decrease by 20 million bushels. C) Imports will decrease by 60 million bushels. D) Imports will not change after the tariff.
Economics