A combination of an increase in the discount rate and an open market sale of government securities by the Fed would:
a. increase the money supply
b. decrease the money supply.
c. leave the money supply unchanged.
d. have an indeterminate effect on the money supply.
b
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A Purchasing Manager's Index above 50 indicates
A) an expanding manufacturing sector. B) a downturn in economic activity. C) an increase in bond prices in the near future. D) an expanding retail sector.
If the real exchange rate is less than 1, then the
a. nominal exchange rate x U.S. price > foreign price. The dollars required to purchase a good in the U.S. would buy more than enough foreign currency to buy the same good overseas. b. nominal exchange rate x U.S. price > foreign price. The dollars required to purchase a good in the U.S. would not buy enough foreign currency to buy the same good overseas. c. nominal exchange rate x U.S. price < foreign price. The dollars required to purchase a good in the U.S. would buy more than enough foreign currency to buy the same good overseas. d. nominal exchange rate x U.S. price < foreign price. The dollars required to purchase a good in the U.S. would not buy enough foreign currency to buy the same good overseas.