Decreasing the required reserve ratio is an expansionary policy because it increases the amount of ...

Decreasing the required reserve ratio is an expansionary policy because it increases the amount of excess reserves in the banking system.
a. True
b. False
Indicate whether the statement is true or false

QUESTION 2

Movement along the aggregate demand curve may be caused by a change in autonomous investment spending.
a. True
b. False
Indicate whether the statement is true or false

QUESTION 3

During the 2008 crisis, the Fed demanded interest payments on reserves held at the Fed.
a. True
b. False
Indicate whether the statement is true or false

QUESTION 4

A change in consumers' expectations about the future will shift both the aggregate expenditure curve and the aggregate demand curve.
a. True
b. False
Indicate whether the statement is true or false

QUESTION 5

The Fed tries to prevent major financial crises through its control of financial markets.
a. True
b. False
Indicate whether the statement is true or false

QUESTION 6

If current aggregate expenditure equals current production, an economy is in equilibrium.
a. True
b. False
Indicate whether the statement is true or false

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Decreasing the required reserve ratio is an expansionary policy because it increases the amount of ...

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