A depository institution creates liquidity and pools risk
Indicate whether the statement is true or false
TRUE
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Which of the following would cause an increase in aggregate demand in the short run?
A) an increase in taxes B) an increase in the supply of money C) a decrease in the price level D) a crop failure
The Fed raises the federal funds rate when it
A) fears inflation. B) wants to increase the quantity of money. C) fears recession. D) wants to encourage bank lending. E) cannot change the quantity of money.
The costs which can be avoided if we alter our decisions or choices are referred to as:
a. average costs. b. opportunity costs. c. marginal costs. d. sunk costs.
Explain the following statement by Arthur Okun: "Insistence on carving the pie into equal slices would shrink the size of the pie. This fact poses the trade-off between economic equality and economic efficiency."
What will be an ideal response?