Expansionary monetary policy is achieved by:
A) decreasing the amount of bank reserves and lowering the federal funds rate.
B) decreasing the amount of bank reserves and raising the federal funds rate.
C) increasing the amount of bank reserves and lowering the federal funds rate.
D) increasing the amount of bank reserves and raising the federal funds rate.
C
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In a small economy, consumption spending is $6,000, government spending is $1,200, gross investment is $1,500, exports are $2,000, and imports are $1,000. What is gross domestic product?
A) $9,700 B) $9,800 C) $10,800 D) $11,700
Since one function of financial intermediaries is to provide liquidity:
A. regulations require financial intermediaries to keep 50% of their assets in cash. B. they keep almost all of their funds in cash. C. they must know approximately how much liquidity their customers will need each day and have these funds available. D. they must keep all of their funds in short-term securities.