"The federal budget is required by law to balance." Is the previous statement correct or incorrect?
What will be an ideal response?
The statement is incorrect because the federal budget is not legally required to balance. It is legal for the government to run a budget surplus or a budget deficit.
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Fiscal policy attempts to make access to credit easier and cheaper
Indicate whether the statement is true or false
Which of the following statements about unanticipated inflation is true?
a. It reduces average purchasing power in the economy. b. It reduces total purchasing power in the economy. c. It redistributes purchasing power in the economy. d. It reduces nominal wages. e. Its effects are spread evenly throughout the economy so that no one gains or loses from inflation.
The formula for required reserves is:
A. rD. B. D/rD. C. 1/rD. D. (1/rD ) D.
Which of the following best describes a monetary policy tool?
A. interest rates B. taxes C. household savings D. government spending