A)is an open market sale of securities by the U.S. Federal Reserve.
B)is an open market purchase of securities by the U.S. Federal Reserve.
C)decreases bank reserves.
D)raises the nominal interest rate.
E)is an open market purchase of securities by Congress.
A)the M1 multiplier is less than the M2 multiplier.
B)the money multiplier increases when the desired reserve ratio increases.
C)the money multiplier increases when the currency drain ratio increases.
D)the M1 multiplier decreases over time.
E)the M2 multiplier decreases over time.
When the nominal interest rate rises, the opportunity cost of holding money
A)rises and people hold more money.
B)falls and people hold more money.
C)falls and people hold less money.
D)rises and people hold less money.
E)does not change.
When the interest rate falls in the money market, the quantity of money demanded ________ and the quantity of money supplied ________.
A)increases; remains unchanged
C)remains unchanged; decreases
D)remains unchanged; remains unchanged