Which of the following is NOT a reason that interest rates remained low despite high budget deficits following the financial crisis?
A) increased demand for U.S. government bonds
B) the perceived riskiness of alternative investments such as stocks
C) low interest rates on CDs and similar short-term assets
D) increases in expected inflation
D
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Suppose a bank has $1,500,000 in deposits and the desired reserve ratio is 12 percent. If the bank is currently holding $200,000 in reserves, the excess reserves are equal to
A) zero. B) $180,000. C) $120,000. D) $20,000.
Government purchases, under the expenditure approach to GDP accounting, do not include: a. state government purchases of plumbing services. b. Social Security benefit payments to retirees
c. the salaries of military officers. d. federal government purchases of computers.
Suppose a taxpayer has an income of $120,000 and a taxable income of $80,000, and pays $20,000 in taxes. If the taxpayer says she is taxed at a 25 percent tax rate, she is referring to the
A. Effective tax rate. B. Marginal tax rate. C. Nominal tax rate. D. Average tax rate.
Saving and borrowing is indicative of a family that
a. is most likely to be poor. b. has a difficult time balancing its standard of living. c. does not adjust its standard of living to reflect transitory changes in income. d. is most likely millionaires.