Refer to Figure 28-2. Suppose the Fed used contractionary policy to push short-run equilibrium to point C. If the short-run equilibrium remained at point C long enough
A) the short-run Phillips curve would shift up.
B) the economy would stay at point C in the long run.
C) the economy would move back to point A.
D) the short-run Phillips curve would shift down.
D
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If the price of $1 is 1.67 Swiss francs, the price of a Swiss franc is
A) $0.33. B) $1.67. C) $2.00. D) $0.67.
The reason why the banking system can increase checkable deposits by a multiple of initial deposits is that:
A. reserves lost by any particular bank are gained by the Federal Reserve Bank. B. the banking system must keep reserves equal to 100 percent of its checkable deposits. C. the central bank follows policies that prevent reserves from falling below the level required by law. D. borrowers often spend most of a loan which is then deposited.