Which of the following tools of monetary policy is flexible and able to affect bank reserves quickly and by relatively specific amounts?
A. The discount rate.
B. The reserve ratio.
C. Open-market operations.
D. The federal funds rate.
C. Open-market operations.
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Farmers can plant either corn or soybeans in their fields. Which of the following would cause the supply of soybeans to increase?
A) an increase in the demand for corn B) an increase in the price of soybeans C) a decrease in the price of corn D) an increase in the price of soybean seeds
Suppose the economy is producing at the natural rate of output. A decrease in consumer and business confidence will cause ________ in real GDP in the short run and ________ in inflation in the short run, everything else held constant
A) an increase; an increase B) a decrease; a decrease C) no change; an increase D) no change; a decrease