When the Federal Reserve purchases treasury securities in the open market,
A. The sellers of such securities by new securities in the open market and there is an increase in bank reserves
B. The sellers of such securities deposits the funds in their banks and bank reserves increase
C. The buyers of those securities pay for them with checks drawn on their bank account and bank reserves increase
Ans: B. The sellers of such securities deposits the funds in their banks and bank reserves increase
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In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices. B. lower prices. C. lower output. D. None of these is true.
Expansionary monetary policy would shift the
A. aggregate supply curve up and to the left. B. aggregate demand curve to the right. C. aggregate supply curve down and to the right. D. aggregate demand curve to the left.