e. 23 38. Use the correct answer from question 37 above to determine how much th

Question

e. 23 38. Use the correct answer from question 37 above to determine how much the money supply could change if the Fed buys $1,000 in government bonds. a. It will increase by 20,000 b. It will increase by 25,000 c. It will decrease by 10,000 d. It will decrease by 20,000 e. None of the above. 39. The asset demand for money is a function of: a. income. b. government transfer payments. c. anticipated emergencies d. FED monetary policy. e. the prevailing interest rate. 40. The new tariffs on aluminum and steel imposed by the Trump Administration are based on which argument for protection a. the infant industry argument b. the military self sufficiency argument c. the cheap labor argument d. the dumping argument e. any of the above could be correct

Explanation / Answer

For question 38, information from question 37 is needed. But let me tell you how you can do it.

Let requirer reserve ratio be r.

Fed buys bonds, this will increase money supply.

Money supply will increase by (1/r)*1000

39) a is correct

Demand for money is a function is income and interest rate but it is not the prevailing interest rate.

40) b is correct

The argument is military self sufficiency. By imposing tariffs domestic industries that produce equipment for military are protected against foreign competition.

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.