When the Fed raises the required reserve ratio, it:
a. lowers the cost of borrowing from the Fed, encouraging banks to make loans to the general public.
b. raises the cost of borrowing from the Fed, discouraging banks from making loans to the general public.
c. increases the amount of excess reserves that banks hold, encouraging them to make loans to he general public.
d. increases the amount of excess reserves that banks hold, discouraging them from making loans to the general public.
e. decreases the amount of excess reserves that banks hold, discouraging them from making loans to the general public.
e
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If changes in inflation are higher than expected
A) the short-run Phillips curve will be negatively sloped. B) the short-run Phillips curve will be vertical. C) the short-run Phillips curve will be positively sloped, but not vertical. D) the long-run Phillips curve will be negatively sloped.
A good policy ________________ and a bad policy _________________
a. Moves an asset to higher value use; moves an asset to lower value use b. Moves an asset to lower value use; moves an asset to higher value use c. Refrains from any government intervention; concentrates on government intervention d. Concentrates on government intervention; refrains from government intervention