Which of the following would cause the money supply in the United States to decrease?
a. An increase in reserve requirements
b. A decrease in the discount rate
c. A purchase of U.S. government bonds by the Federal Reserve
d. An increase in the world supply of gold
a
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Suppose at the current price, the demand for copper is estimated at -3.14. What happens to sales revenue if the government imposes a price ceiling below the free market equilibrium price in the copper market?
A) Sales revenue falls. B) Sales revenue remains unchanged because copper is a necessity for most industries. C) Sales revenue rises. D) It cannot be determined without information on prices.
Which of the following is an example of active fiscal policy?
a. Income tax revenues rise in an inflationary period. b. Income tax revenues fall in a recession. c. Congress passes a major tax increase in an inflationary period. d. Unemployment benefits increase in a recession.