Automatic stabilizers
A. eliminate the business cycle.
B. include increasing and decreasing tax bracket rates.
C. guarantee that the federal budget will be balanced over the course of the business cycle.
D. require no legislative action by Congress to be made effective.
D. require no legislative action by Congress to be made effective.
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To reduce the amount of excess reserves in an economy, the central bank of a country can: a. reduce the interest rate on loans granted by commercial banks to the public
b. pay interest on the reserves that commercial banks have deposited with the central bank. c. reduce the discount rate. d. buy government securities from the public.
Suppose a policy change generates $90,000 of benefits for low-income families and $150,000 of costs for high-income families. We can best describe the change as
A. equitable. B. potentially efficient. C. inefficient. D. Pareto efficient.
Bonds with ________ tend to have higher interest rates than bonds with ________
A) high liquidity; low liquidity B) high default risk; low default risk C) shorter maturity; longer maturity D) low tax burdens on their interest; high tax burdens on their interest
Which of the following falls when bond prices rise?
a. Stock prices. b. Interest rates. c. Money demand. d. Money supply.