Assume that the reserve requirement is 25%. If the Federal Reserve sells $120 million in government securities to the general public, the money supply will immediately ________.
A. increase by $120 million with this transaction, and the increase in money supply could eventually reach a maximum of $480 million
B. increase by $120 million with this transaction, and the increase in money supply could eventually reach a maximum of $360 million
C. decrease by $120 million with this transaction, and the decrease in money supply could eventually reach a maximum of $480 million
D. decrease by $120 million with this transaction, and the decrease in money supply could eventually reach a maximum of $360 million
Answer: C
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A market achieves allocative efficiency when: a. total surplus is at its maximum
b. consumer surplus is at its minimum. c. demand is perfectly elastic. d. market concentration is maximized.
A tax placed on imports is known as
A) voluntary restraint agreement. B) tariff. C) quota. D) infant industry.