If the Fed sells U.S. government securities to drain reserves from banks, which of the following is most likely to occur?
a. The demand for money will increase and the interest rate will rise
b. The money supply will increase and the interest rate will fall.
c. The interest rate will rise and the quantity of money demanded will fall.
d. The money supply will decrease and the interest rate will fall.
e. The interest rate will fall and the quantity of money demanded will increase.
c
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An effective rent control will
A) lead to a surplus of housing units. B) keep rents below the competitive market level. C) keep rents above the competitive market level. D) be set at the price where quantity supplied equals quantity demanded.
Economists assume maximizing efficiency over other goals:
A. is a guiding principle of policy-making. B. is always the best approach. C. should never be followed. D. may not bring about the best outcome for society.