A country reduces its government budget deficit and also makes political reforms that lead people to believe this country's assets are less risky. Given the combination of a reduced deficit and lower asset risk, what happens to the interest rate?
The interest rate falls.
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Which of the following is true of a consumption function with income taxes?
a. It is flatter than a consumption function without income taxes. b. It is steeper than a consumption function without income taxes. c. It lies above a consumption function without income taxes d. It lies below a consumption function without income taxes.
Bank reserves include:
a. High quality (i.e., AAA-rated) loans. b. Vault cash and deposits at the central bank. c. Tellers, who are trained and ready to work in case of a general bank strike. d. Government bonds, high-quality (e.g., AAA) corporate stocks, and cash in circulation. e. Checking deposits and borrowings from the central bank.
When tax code changes reduce saving incentives, the interest rate will _____ and investment will _____
Fill in the blank(s) with correct word
Which of the following statements is true?
A) All economic agents are necessarily individuals. B) A worker who shirks work is not an economic agent. C) A government is an example of an economic agent. D) A street gang is not an economic agent.