Which of the following is false?
a. If the Fed wants to expand the money supply, it could lower the discount rate
b. The discount rate is a relatively unimportant monetary policy tool, mainly because member banks do not rely heavily on the Fed for borrowed funds.
c. Changes in required reserve ratios are such a potent monetary policy tool that they are frequently used.
d. If the Federal Reserve wanted to induce monetary expansion, it could reduce reserve requirements, but it cannot force the banks to make loans, thereby creating new money.
c
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Assuming all else equal, if the price of each unit of capital rises, ________
A) a firm moves to a higher point along its labor demand curve B) a firm moves to a lower point along its labor demand curve C) a firm's labor demand curve shifts to the left D) a firm's labor demand curve shifts to the right
Given the consumption function C = $100 billion + 0.75 ($300 billion), autonomous consumption is equal to:
a. $100 billion. b. $225 billion. c. $300 billion. d. $325 billion. e. $400 billion.