Author Question: The money supply would tend to rise if: a. banks decide to keep more excess reserves and people ... (Read 31 times)

viki · **on:** Jun 30, 2018

The money supply would tend to rise if:
a. banks decide to keep more excess reserves and people convert more of their demand deposits to currency.
b. banks decide to keep more excess reserves and people deposit currency in their demand deposit accounts.
c. banks decide to keep fewer excess reserves and people deposit currency in their demand deposit accounts.
d. banks decide to keep fewer excess reserves and people convert more of their demand deposits to currency.

Question 2

The new Keynesians believe that the economy is not always in equilibrium because:
a. of the existence of voluntary unemployment.
b. the Federal Reserve policy is too restrictive.
c. government intervention destabilizes the economy.
d. of the existence of wage and price rigidities.
e. the rate of inflation is too high.