Which of the following statements is FALSE?
A) Both monetary and interest rate targets cannot be pursued simultaneously.
B) A reduction in the required reserve ratio increases the money supply and pushes down the equilibrium interest rate.
C) An open market purchase reduces the money supply and pushes down the equilibrium interest rate.
D) An open market sale decreases the money supply and pushes up the equilibrium interest rate.
C
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Refer to Figure 5-1. At the efficient equilibrium,
A) economic surplus is minimized. B) economic surplus is maximized. C) economic surplus is zero. D) economic surplus is negative.
The idea of a "New Economy" driven by hi-tech equipment such as computers, cell phones, and the World Wide Web was rooted in part in the apparent simultaneous reversal of which of the following economic problems?
A) inflation B) slow growth in productivity C) the budget deficit D) All of the above