If the currency drain increases, how can the Fed adjust the monetary base to offset the effect on the quantity of money?
What will be an ideal response?
If the currency drain increases, the size of the money multiplier decreases, which decreases the quantity of money. To maintain the quantity of money at its initial amount by changing the monetary base, the Fed must increase the monetary base.
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If the growth rate of real GDP rises from 3% to 4% per year, then the number of years required to double real GDP will decrease from
A) 11.2 years to 10.8 years. B) 23.3 years to 17.5 years. C) 28.0 years to 21.0 years. D) 23.3 years to 20.6 years. Table 21-1 Year Real GDP (billions of 2000 dollars) 2013 $8,700 2014 8,875 2015 9,000 2016 9,280
A perfectly competitive firm trying to maximize profits in the short run will expand output
A. until total revenue equals total cost. B. until marginal cost equals average variable cost. C. until marginal cost begins to rise. D. as long as marginal revenue is greater than marginal cost.