Which of the following observations is true of nontransaction deposits?
a. depositor can use them directly as a means of payment
b. they do not pay any interest
c. depositor cannot directly write checks against them
d. they generally pay lower interest rates than transaction deposits
c
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The Federal Reserve plays a larger role than Congress and the president in stabilizing the economy because
A) the Federal Reserve can more quickly change monetary policy than the president and the Congress can change fiscal policy. B) changes in interest rates have their full effect on the economy in a short period of time, whereas changes in government spending and taxes have their full effect over a long period of time. C) the Federal Reserve can immediately recognize when real GDP is below or above potential GDP. D) changes in interest rates have a considerably larger effect on the economy than changes in government purchases or taxes.
For a firm hiring a resource in a perfectly competitive resource market, its demand curve for the resource is its
a. marginal product curve b. marginal revenue product curve c. marginal resource cost curve d. marginal revenue curve e. total revenue curve
When the Social Security system enters its deficit years and the bonds held in the trust fund are drawn down,
a. overall taxes will be reduced as the trust funds are used to pay benefits to retirees. b. the payroll taxes used to finance Social Security benefits can be reduced because the trust funds will be sufficient to pay the retirement benefits of the baby boom generation. c. taxes will have to be raised (or additional funds will have to be borrowed) in order to redeem the bonds held in the trust fund. d. income taxes will have to be reduced in order to keep the revenues and expenditures of the Social Security system in balance.
Refer to the information provided in Figure 28.7 below to answer the question(s) that follow.
Figure 28.7Refer to Figure 28.7. If the economy is on SRPC3, then the expected inflation rate is
A. 4%. B. 5%. C. 6%. D. none of the above.