When the Fed buys government bonds, the reserves of the banking system
a. increase, so the money supply increases.
b. increase, so the money supply decreases.
c. decrease, so the money supply increases.
d. decrease, so the money supply decreases.
a
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Jorge is debating whether to concentrate on playing professional football or professional baseball. He is offered $6 million a year to play baseball and $8 million a year to play football. If he chooses to play football
A) the economic rent in his salary is $8 million. B) the economic rent in his salary is $6 million. C) the economic rent in his salary is $2 million. D) the economic rent in his salary is $14 million.
Contractionary fiscal policy tends to ________ consumption because it may reduce ________
A. increase; disposable income. B. increase; savings. C. reduce; savings. D. reduce; disposable income.