The Fed can induce banks to increase their reserve holdings by:
A. Increasing the discount rate
B. Reducing the required reserve ratio
C. Increasing the interest on reserves
D. Selling securities in the open market
C. Increasing the interest on reserves
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Every month, Carlos deposits $300 into an interest-bearing account managed by his broker, Megan. Megan pools the funds in Carlos’s account with funds from the accounts of other clients and invests them in short-term securities. Which statement is also true about this situation?
a. This is an example of a savings deposit account. b. This is an example of a demand deposit account. c. Carlos is allowed to write checks against his account, within certain limitations. d. Due to the account type, the funds Carlos has deposited have a low level of liquidity.
Economic growth is
a. growth in inflation over time b. growth in real GDP over time c. growth in unemployment over time d. growth in net exports over time
By 2016, economists had drawn what conclusion about the very low productivity growth that lasted from 2005 to 2015?
A. Productivity slowed because of government overregulation. B. Productivity slowed because of a decrease in investment. C. Productivity averaged only 1.2 percent during that time. D. It was merely a temporary pause in otherwise strong productivity growth.
Economists generally oppose direct regulation because:
A. it is generally unfair. B. it is unlikely to achieve the desired end as efficiently as possible. C. it assumes that people behave rationally. D. it does not assume that people behave rationally.