A bank may hold secondary reserves, such as U.S. government securities because:
a. they pay higher interest rates than deposits at the Fed, and are easily converted into cash assets.
b. they pay higher interest rates than deposits at the Fed, even though they are hard to convert assets.
c. they pay lower interest rates than deposits at the Fed, but are more easily converted into cash assets.
d. they pay lower interest rates than deposits at the Fed, and are hard to convert into cash assets.
a
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The fictional country of Alpetra increases the income tax rate so that tax revenues increase by $50 million. If GDP, consumption, and government spending remains the same and Alpetra is a closed economy, what is the change in investment?
a. $50 million b. $100 million c. No change d. Cannot be determined from the information given
Milton Friedman argued that the economy is not in long-run equilibrium if the expected inflation rate __________ the actual inflation rate
A) is less than B) is greater than C) equals D) a and b
A rightward shift of the Phillips curve implies an increase in both unemployment and inflation.
Answer the following statement true (T) or false (F)
Production possibilities in an economy decrease as more resources and better technology are utilized.
Answer the following statement true (T) or false (F)