A fall in the discount rate will usually encourage banks to borrow from the Fed and therefore reduce the money supply.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 2Which of the following is true?
a. The nominal wage will be constant only if the inflation rate is constant.
b. The real wage will be greater than the nominal wage only if the inflation rate is constant.
c. The nominal wage and the real wage will change by the same amount if the price level is constant.
d. The real wage will be equal to one only if the price level is zero.
e. The real wage will be constant only if the nominal wage is constant.
QUESTION 3One of the main functions of the Fed is minting U.S. coins.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 4A nominal wage is:
a. always equal to the legal minimum wage.
b. the same as the efficiency wage.
c. measured in terms of the amount of goods and services it can purchase.
d. measured in current dollars rather than in constant dollars.
e. measured in constant dollars rather than in current dollars.
QUESTION 5By reducing the required reserve ratio, the Fed can not only create excess reserves but also increase the money multiplier.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 6Which of the following is true of the short-run aggregate supply curve?
a. It shows the relation between the inflation rate and the quantity of aggregate output firms supply, other things constant.
b. It shows the relation between the price of labor and the aggregate quantity of labor workers supply, other things constant.
c. It shows the relation between the interest rate and the quantity of capital goods firms supply, other things constant.
d. It shows the relation between the price level and the quantity of aggregate output firms supply, other things constant.
e. It shows an inverse relationship between the price level and real GDP.
QUESTION 7A higher discount rate generally decreases excess reserves.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 8Only a change in the price level can cause shifts in both the aggregate expenditure line and the aggregate demand curve.
a. True
b. False
Indicate whether the statement is true or false
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