How do changes in open market operations alter the monetary base, and how do changes in the monetary base translate to changes in the money supply?
The monetary base is the sum of commercial bank reserves and currency in circulation. Open market purchases will increase bank reserves and, therefore, increase the monetary base; open market sales will reduce bank reserves and reduce the monetary base. Since additions to the monetary base are at least partly reflected in additions to bank reserves, each dollar added to the monetary base represents several dollars added to the money supply. This is a consequence of the deposit multiplier process.
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All of the following are characteristics of the pure coordination game except
A) Nash equilibria exist at every outcome where players successfully coordinate. B) each player has a dominant strategy. C) the payoff for coordinating is higher than the payoff for not coordinating. D) the two general outcomes are that the players either coordinate with each other or they do not.
Advertising costs are ________ costs and the per unit cost of advertising ________ as production increases
A) fixed; increases B) variable; increases C) fixed; decreases D) variable; does not change