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Economics
and the Federa

and the Federa

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Multiple choice, no need to explain just need the answer. Thank you so much If the reserve requirementis 20 percent, banks hold no excess reserves, and the Federal Reserve purchases $100 million worth of bonds on the open market, how will the monetary base change? It will decrease by $100 million. It will increase by $100 million. It will decrease by $20 million. It will increase by $20 million. Which of the following scenarios would explain the Federal Reserve selling securi ties on the open market? The actual unemployment rate exceeds the natural unemployment rate. The short-run equilibrium is less than long-run equilibrium. Aggregate demand is growing faster than long-run aggregate supply, creating inflation. The government decreases spending by a significant amount.
Transcribed Image Text:Multiple choice, no need to explain just need the answer. Thank you so much If the reserve requirementis 20 percent, banks hold no excess reserves, and the Federal Reserve purchases $100 million worth of bonds on the open market, how will the monetary base change? It will decrease by $100 million. It will increase by $100 million. It will decrease by $20 million. It will increase by $20 million. Which of the following scenarios would explain the Federal Reserve selling securi ties on the open market? The actual unemployment rate exceeds the natural unemployment rate. The short-run equilibrium is less than long-run equilibrium. Aggregate demand is growing faster than long-run aggregate supply, creating inflation. The government decreases spending by a significant amount.
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