The sum of currency issued by the central bank and bank deposits at the central bank is called
A. domestic assets.
B. the monetary base.
C. the money supply.
D. fractional reserves.
Answer: B
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Which of the following is likely to happen if the government decides to impose a tariff?
A) Domestic consumers will be better off. B) The revenue earned by the government will decrease. C) Domestic producers will face higher foreign competition. D) The domestic industry will earn higher profits.
If planned aggregate expenditure is above potential GDP and planned aggregate expenditure equals GDP, then
A) the economy is in an expansion. B) actual inventory investment will be less than planned inventory investment. C) actual inventory investment will be greater than planned inventory investment. D) the economy is at full employment.
In the simple deposit expansion model, if the required reserve ratio is 20 percent and the Fed increases reserves by $100, checkable deposits can potentially expand by
A) $100. B) $250. C) $500. D) $1,000.
Even a monetary policy based on a rigid high-powered money growth rate rule can lack policy credibility, due in part to ________, while a policy that targets the inflation rate itself ________
A) lags, must have policy credibility by definition B) lags, can lack credibility due to both lags and multiplier certainty C) multiplier uncertainty, must have policy credibility by definition D) multiplier uncertainty, can lack credibility due to both lags and multiplier uncertainty