The "quantitative easing" policies of the Fed during, and following, the financial crisis of 2008-2009,
a. expanded the reserves available to the banking system, leading to a rapid increase in the M1 money supply as banks used the reserves to extend additional loans.
b. reduced the reserves available to the banking system, leading to a sharp reduction in outstanding loans and a decline in the M1 money supply.
c. expanded the reserves available to the banking system, but the M1 money supply increased slowly because the banks enlarged their excess reserves.
d. reduced the reserves available to the banking system, leading to a substantial increase in outstanding loans and the M1 money supply.
C
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Which of the following would be an illustration of a microeconomic issue affecting U.S. auto manufacturers?
A) An introduction of new, more fuel efficient models by Japanese competitors. B) A recession in Europe that causes U.S. auto exports to Europe to decline. C) A decline in the demand for new cars in the U.S. due to an economic downturn. D) An appreciation of the U.S. dollar relative to the Japanese yen.
Empirical evidence shows that the quantity theory of money is a good theory of inflation
A) in the long run, but not in the short run. B) in the short run, but not in the longrun. C) in both the long run and the short run. D) not in either the long run nor the short run.