A decrease in the discount rate ________ bank reserves and ________ the money supply if banks respond appropriately to the change in the rate
A) increases; decreases B) decreases; decreases
C) increases; increases D) decreases; increases
C
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The presence of transactions costs and information costs
A) lowers the cost of funds to borrowers. B) raises the expected return to lenders. C) lowers the expected return to lenders. D) increases the efficiency of the financial system.
Utility is the set of numerical values that
A) yields an absolute level of pleasure from a bundle of goods. B) reflects the relative ranking of various bundles of goods. C) describes how much more a consumer prefers one bundle to another. D) yields a cardinal ranking of bundles.
A mathematical formula for the deficit would be
A. C + I + G ? transfers + taxes. B. C + I + G + transfers – taxes. C. I + G + transfers – taxes. D. G + transfers – taxes.
As both the budget and regulatory powers of government grow, public choice analysis indicates that individuals and groups will find it in their interest to
a. increase their efforts devoted toward market production. b. spend less time attempting to secure redistribution through government. c. spend more time informing themselves about political issues, so they can cast a well-informed vote. d. spend more time rent seeking.