If the Federal Reserve buys $500 of government securities when the required reserve ratio is 20 percent, the maximum potential change in the money supply is a(n)
A) increase by $100.
B) increase by $2,500.
C) decrease by $100.
D) decrease by $2,500.
B
Economics
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Unemployment
a. rises during expansions. b. falls when households save a larger fraction of their income. c. decreases as production falls. d. moves in the opposite direction as real GDP.
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Most economists believe that the biases in the consumer price index cause the CPI to overstate the true inflation rate by about
A) one quarter percentage point. B) one to two percentage points. C) one and one-half percentage points. D) one-half to one percentage point.
Economics