The government budget constraint tells us that to the extent that government expenditures are NOT financed by tax collection, the public ends up holding ________ government bonds and ________ money
A) more, more
B) more, less
C) fewer, more
D) fewer, less
A
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If you use $500 of currency to make a deposit in a saving deposit
A) M1 decreases, but M2 is unchanged. B) M1 decreases and M2 increases. C) M1 is unchanged, but M2 increases. D) M1 and M2 both increase.
Other things remaining the same, if the expected future exchange rate rises, the demand curve for U.S. dollars shifts ________ and the supply curve of U.S. dollars shifts ________
A) rightward; rightward B) rightward; leftward C) leftward; rightward D) leftward; leftward
The one-year re-pricing GAP is a measure of __________ risk
A) credit B) leverage C) interest rate D) liquidity
To maintain a fixed exchange rate, in response to an increase in the government budget deficit the central bank must
a. sell foreign currency from reserves. b. buy foreign currency. c. raise taxes. d. raise government spending. e. pass a law that increases the exchange rate.