Which of the following would occur if the federal government decided to use a budget surplus to reduce the existing debt?
A. Crowding out and public sector output would decrease.
B. Crowding out and public sector output would increase.
C. Crowding in and private sector output would increase.
D. Crowding in and private sector output would decrease.
Answer: C
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A krone/euro peg alone is
A) not enough to provide automatic stability in the face of any monetary shocks that shift the AA schedule. B) enough to provide automatic stability in the face of any monetary shocks that shift the AA schedule. C) not enough to provide automatic stability in the face of any monetary shocks that shift the AA schedule, provided fiscal policy will be used as well. D) enough to provide automatic stability in the face of any monetary shocks that shift the AA schedule, provided the government runs a budget deficit. E) enough to provide partial stability in the face of smaller monetary shocks that shift the AA schedule.
Which of the following measures the rate of return a bond is expected over time?
a. Bond yield b. Interest rate c. Bond equity d. Coupon rate
When the money market is drawn with the value of money on the vertical axis, as the price level decreases, the value of money
a. increases, so the quantity of money demanded increases. b. increases, so the quantity of money demanded decreases. c. decreases, so the quantity of money demanded decreases. d. decreases, so the quantity of money demanded increases.
The federal funds rate is
A. the interest rate banks charge the federal government. B. the interest rate on short-term loans of reserves from one bank to another. C. the interest rate banks charge their most credit-worthy customers. D. the interest rate on federal government bonds.