Lowering the required reserve ratio raises the simple deposit multiplier
Indicate whether the statement is true or false
True
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Changing the basis of taxation from income earned to amount spent will
a. necessarily reduce tax revenues. b. lower effective interest rates on savings. c. distort incentives to earn income. d. eliminate disincentives to save.
A direct relationship exists when:
A. there is no association between two variables. B. one variable increases and there is no change in the other variable. C. one variable increases and the other variable increases. D. one variable increases and the other variable decreases.
A two-way network that links users and in which the per-unit value of the service increases as the size of the network increases is a:
A. negative externality known as a direct network externality. B. positive externality known as a direct network externality. C. negative externality known as an indirect network externality. D. positive externality known as an indirect network externality.
The prime interest rate usually:
A. rises when the federal funds rate rises. B. rises when the discount rate falls. C. falls when the federal funds rate rises. D. falls when the Fed sells bonds in the open market.