The major categories of federal government spending are
What will be an ideal response?
health care, national defense, Social Security, and other income transfers.
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________ in the currency drain ratio and ________ in the desired reserve ratio ________ the money multiplier
A) An increase; a decrease; increase B) A decrease; a decrease; increase C) A decrease; an increase; decrease D) An increase; an increase; increase E) An increase; a decrease; decrease
Governments have often intervened in financial markets because they believed that
a. interest rates were too low b. competition among banks leads to poor services c. bank lending was favoring lucrative projects at the expense of crucial development needs d. too much foreign money was entering their financial systems e. all of the above
Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot can offer this hammer for a minimum of $7. Lace Hardware can offer the hammer for a minimum of $10. Bob's Hardware store can offer the hammer at a minimum price of $13.
Given the scenario described, if the market price of hammers was $13, then total producer surplus would be: A. $9. B. $30. C. $17. D. $7.
Which of the following examples reflects the liquidity trap?
a. After a bank receives additional reserves, it collects interest on those funds rather than loaning them. b. After receiving additional reserves, a bank invests large sums in a bull market. c. After a bank receives additional reserves, the number of loans it makes increases significantly. d. After receiving additional reserves, a bank uses half of them for investments.