To anticipate what the economy is going to do next the government will look at:
a) Lagging indicators
b) Flashing indicators
c) Coincidental indicators
d) Leading indicators
Answer: d) Leading indicators
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In the long run, the nominal interest rate is
A) negatively related to the inflation rate. B) positively related to the inflation rate. C) negatively related to the price level. D) positively related to the price level. E) not related to the price level or the inflation rate.
A current concern about Social Security is that
A) funds set aside by past generations to pay benefits for future generations are growing too rapidly and may trigger inflation. B) promised benefit payouts are growing more rapidly than likely sources of revenues, indicating a future inability to keep the system operating. C) continued political bickering between the president and Congress could lead to an end to any funding of the program. D) the payroll taxes used to fund the program are being eliminated as part of an effort to generate employment increases, thus leaving the program bankrupt.
Which of the following practices is restricted by the antitrust laws of the United States?
a. Merger of smaller firms into a large firm b. Entry of new firms in the long run c. Standardization of products in a market d. Exit of non-performing firms in the long run e. Quality differentiation by competitive firms
If the reserve requirement for a bank is $200,000 for a deposit of $1 million, then the money multiplier is:
a. 1.25 b. 2.0 c. 5 d. 20