The Monetary Base Will Increase for All of the Following

question 65

Multiple Choice

The monetary base will increase for all of the following reasons EXCEPT

• A)increase in discount loans.
• B)increase in Federal Reserve Float.
• C)increase in securities held by Fed.
• D)increase in Treasury deposits at the Fed.

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Definitions:

Inelastic

Pertains to a scenario where the level of demand or supply for a product or service shows little reaction to price fluctuations.

Demand and Supply

Demand and Supply are fundamental economic concepts that describe the quantities of goods or services that consumers wish to purchase at various prices and the quantities that producers are willing to sell.

Efficiency Loss

Refers to the waste of resources that occurs when market conditions prevent the allocation of resources in a way that maximizes utility or welfare.

Elasticity of Supply

A measure of the responsiveness of the quantity supplied of a good or service to a change in its price, indicating how producers react to price variations.