Economic growth can best be portrayed as a:
A. Leftward shift of the production possibilities curve
B. Movement from a point inside to a point outside of the production possibilities curve
C. Movement from a point near the vertical axis to a point near the horizontal axis on the
production possibilities curve
D. Rightward shift of the production possibilities curve
D. Rightward shift of the production possibilities curve
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Everything else held constant, in the market for reserves, when the federal funds rate is 3%, lowering the interest rate paid on excess reserves rate from 2% to 1%
A) lowers the federal funds rate. B) raises the federal funds rate. C) has no effect on the federal funds rate. D) has an indeterminate effect on the federal funds rate.
According to new classical economists, the most appropriate policy during a recession would be for the government to
a. increase the minimum wage. b. impose wage and price controls. c. cut taxes and increase the budget deficit. d. do nothing.
Which is true?
A. M1 is part of M2, but M2 is not part of M3. B. M1 is not part of M2, but M2 is part of M3. C. M1 is part of M2, and M2 is part of M3. D. None of the choices are true.
Why is the international financial system today often called a “nonsystem”?
What will be an ideal response?