If the Fed wanted to decrease the money supply, one way to make an enormous impact would be to:
A. decrease the reserve requirement, which would increase the money multiplier.
B. increase the reserve requirement, which would decrease the money multiplier.
C. increase the reserve requirement, which would increase the money multiplier.
D. decrease the reserve requirement, which would decrease the money multiplier.
Answer: B
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In the above figure, suppose the economy is initially on the demand for money curve MD1. What is the effect of an increase in real GDP?
A) The demand for money curve would shift rightward to MD2. B) The demand for money curve would shift leftward to MD0. C) There would be a movement upward along the demand for money curve MD1. D) There would be a movement downward along the demand for money curve MD1.
The natural rate of unemployment is impervious to economic policy
a. True b. False Indicate whether the statement is true or false