If the Fed acts to decrease the money supply,
A) it will increase the supply of bonds, drive bond prices up, and drive interest rates down.
B) it will increase the demand for bonds, drive bond prices down, and drive interest rates down.
C) it will increase the supply of bonds, drive bond prices down, and drive interest rates up.
D) it will increase the demand for bonds, drive bond prices up, and drive interest rates down.
Ans: C) it will increase the supply of bonds, drive bond prices down, and drive interest rates up.
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A decrease in the money wage rate
A) increases the long-run aggregate supply. B) decreases the long-run aggregate supply. C) increases the short-run aggregate supply. D) decreases the short-run aggregate supply.
The Economic Recovery Act of 2008 included a temporary increase in the federal deposit insurance ceiling from $100,000 to $250,000. The likely objective was to ________
A) boost bank profitability B) increase the money supply C) discourage withdrawals from banks D) bail out the Federal Deposit Insurance Corporation (FDIC)