If the Federal Open Market Committee decides to increase the money supply, then the Federal Reserve
a. creates dollars and uses them to purchase government bonds from the public.
b. sells government bonds from its portfolio to the public.
c. creates dollars and uses them to purchase various types of stocks and bonds from the public.
d. sells various types of stocks and bonds from its portfolio to the public.
a
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Maryanne expects to work for another 30 years and expects to live another 10 years after she retires. If Maryanne completely smooths consumption over her lifetime, her marginal propensity to consume out of wealth is
A) 0.025. B) 0.033. C) 0.075. D) 0.10.
Another commonly used algebraic form for a demand function is the semi-logarithmic functional form, log(Q) = a - bP + cI, where Q is quantity demanded, P is the product price, and I is income
Here, -100b represents the percentage change in quantity demanded given a one unit increase in price. By the Law of Demand, we should expect the value of b to be: A) positive. B) negative. C) positive or negative. D) We do not have enough information to answer this question.