The interest rate charged on overnight loans of reserves between banks is the
A) prime rate.
B) discount rate.
C) federal funds rate.
D) Treasury bill rate.
C
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An increase in government expenditure can ________ potential GDP and an increase in taxes can ________ potential GDP
A) increase; never change B) increase; increase C) decrease; decrease D) never change; never change E) increase; decrease
A critical function of the government in facilitating the operation of a market economy is
A) controlling the market prices of food items. B) ensuring an equal distribution of income to all citizens. C) producing goods and services for low-income households. D) setting up and enforcing private property rights.
Consumption expenditure decreases when ________ decreases.
A. The interest rate B. The price level C. Disposable income D. Saving
A depression is different from a recession in that
A. a recession has inflation and a depression does not. B. a depression is much worse. C. a depression has inflation and a recession does not. D. a recession is much worse.