Checkable deposits are
A. assets of commercial banks and savings institutions.
B. debts of the federal government and government agencies.
C. assets of the federal government and government agencies.
D. debts of commercial banks and savings institutions.
Answer: D
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Which of the following would cause the LM curve to shift to the right?
A) increased money supply B) a larger U.S. capital account deficit C) a depreciation of the dollar D) lower level of U.S. income
Fiscal policy is likely to fail to correct stagflation in an economy because: a. it affects both aggregate demand and supply, although only aggregate supply needs to be changed
b. it affects both the aggregate demand and supply, although only aggregate demand needs to be changed. c. it affects aggregate demand only, although aggregate supply needs to changed. d. it affects aggregate supply only, although only aggregate demand needs to be changed. e. it affects either aggregate demand or aggregate supply, although both need to be changed simultaneously.
The present value of $1 received 1 year from now, given the current interest rate of 7%, is about
A. $.90. B. $.91. C. $.93. D. $1.00.
The rational expectations hypothesis is a theory that states that
A. people make their economic plans by relying on the policy statements made by the President and by leaders in Congress. B. individuals can predict the future perfectly, at least with respect to macroeconomic variables like the interest rate and inflation. C. people make their economic plans by using all available past and present information and their understanding about how the economy operates. D. people make their economic plans in an irrational, intuitive manner.