To offset the effect of households and firms deciding to hold more of their money in checking account deposits and less in currency, the Federal Reserve could
A) raise government spending. B) sell Treasury securities.
C) raise bank taxes. D) lower the required reserve ratio.
B
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You are an economic advisor to the president. You are asked to recommend a policy to promote long-term economic growth in the economy. Which of the following policies would you choose?
A) a reduction in taxes on luxury yachts B) an investment tax credit C) a reduction in sales taxes D) all of the above
The infant-industry argument about tariffs argues that:
a. it is unfair to levy tariffs on items intended for use by infants. b. tariffs should be levied on foreign products that compete with new domestic industries only in the short run. c. if a newly established domestic industry can survive in the short run, a tariff should be levied to protect it from foreign competition in the long run. d. permanent tariffs should be levied on foreign products that compete with those produced by newly established domestic industries.