The Fed primarily uses the reserve requirement to control the money supply.

The Fed primarily uses the reserve requirement to control the money supply.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 2

If there are no unintended changes in inventories, the economy is at its equilibrium level of real gross domestic product (GDP) demanded.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 3

If a bank receives 1,000 in currency as a new deposit, its ability to make loans increases by 1,000.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 4

Movement along the aggregate expenditure line is caused by a change in the level of income.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 5

The Fed relies primarily on the discount rate to control the money supply.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 6

Aggregate expenditure means total or combined spending.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 7

If a bank receives 2,500 of reserves by selling a government bond to the Fed, its ability to make loans increases by 2,500.
 a. True
  b. False
  Indicate whether the statement is true or false