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econ final

D income and money demand name ri’s name 5 the

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Unformatted text preview: D) income and money demand. NAME: RI’s NAME: 5. The required reserve ratio is 25%. If the Fed sells $5 million worth of government securities to the public, the change in the money supply will be: A) -$20 million. B) -$25 million. C) $25 million. D) $20 million. 6. Suppose the current equilibrium interest rate in the economy is 5%. What could make the equilibrium interest rate rise to 6%? A) The Fed sells government securities. B) A decrease in the GDP. C) A decrease in the discount rate. D) All of the above. 7. Which of the following sequence of events follows an expansionary monetary policy? A) r↑ ⇒ I↓ ⇒ AE↓ ⇒ Y↓. B) r↑ ⇒ I↑ ⇒ AE↓ ⇒ Y↑. C) r↓ ⇒ I↑ ⇒ AE↑ ⇒ Y↑. D) r↓ ⇒ I↓ ⇒ AE↓ ⇒ Y↓. 8. Which of the following reduces the severity of the crowding-out effect whenever the government increases spending? A) An expansionary monetary policy. B) An expansionary fiscal policy. C) A contractionary monetary policy. D) A contractionary fiscal policy. 9. If the federal government is reducing net taxes to stimulate the economy at the same time the Fed is selling bonds in the open market, the effectiveness of the expansionary fiscal policy will be: A) increased, because the Fed’s actions will result in lower interest rates and a reduction in the crowding-out effect. B) reduced, because the Fed’s actions will result in higher interest rates and an increase in the crowding-out effect. C) increased, because the Fed’s actions will result in lower interest rates and an increase in the crowding-out effect. D) reduced, because the Fed’s actions will result in lower interest rates and an increase in the crowding-out effect. NAME: RI’s NAME: 10. Labor Force Participation 65% Total population 16 years of age and older 200 million Unemployment Rate 5% The total number of people unemployed is: A) 7.58 million. B) 10 million. C) 6.83 million....
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D income and money demand NAME RI’s NAME 5 The required...

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