The financing of government spending by issuing debt
A) causes both reserves and the monetary base to rise.
B) causes both reserves and the monetary base to decline.
C) causes reserves to rise, but the monetary base to decline.
D) has no net effect on the monetary base.
D
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In the short run, an unanticipated shift to a more restrictive monetary policy is most likely to result in
a. a decrease in short-term interest rates. b. a reduction in the growth rate of real GDP. c. an increase in the rate of inflation. d. an increase in employment.
Below are pairs of GDP growth rates and unemployment rates. Economists would be shocked to see most of these pairs in the U. S. Which pair of GDP growth rates and unemployment rates is realistic?
a. 5 percent, 1 percent b. 3 percent, 5 percent c. -1 percent, 3 percent d. -2 percent, 4 percent