Why might the Fed decide to monetize the deficit?
A. To keep inflation low
B. To reduce the structural deficit
C. To reduce the budget deficit
D. To keep interest rates low
Answer: D
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In a world with money and bonds only
A) it is not risky to hold money. B) it is risky to hold money. C) risk is an important factor in the demand for money. D) there is no relationship between risk and holding money. E) assets become meaningless.
Dollarization by a foreign country is another form of:
a. balancing a country's current account. b. maintaining monetary policy independence. c. fixing an exchange rate. d. maintaining a balanced government budget.
What is one of the most important benefits of the Internet?
A) The Internet has increased asymmetric information. B) The Internet has reduced asymmetric information. C) The Internet has increased moral hazard. D) The Internet has increased transaction costs.
A good that has external benefits associated with its production will be
A) produced at the optimal level. B) underproduced. C) overproduced. D) not produced.