The primary way that banks earn money is:
A. through lending funds and collecting interest on those loans.
B. through the accumulation of deposits.
C. by lending money to the government.
D. by the government paying them to regulate the financial system.
A. through lending funds and collecting interest on those loans.
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The Fed's countercyclical policy tools to eliminate a recession include lowering:
a. the required reserve ratio, cutting the discount rate, and selling government bonds on the open market. b. the required reserve ratio, raising the discount rate, and selling government bonds on the open market. c. the required reserve ratio, raising the discount rate, and buying government bonds on the open market. d. the discount rate, cutting the discount rate, and raising the margin requirement. e. the reserve requirement, lowering the discount rate, and buying government bonds on the open market.
An isoquant is the locus of the different combinations of inputs that produce the same level of output
Indicate whether the statement is true or false
Aggregate supply denotes the relationship between the __________________ that firms choose to produce and sell and the _________________, holding the price of inputs fixed.
a. total quantity; price level for output b. type of goods; input price of raw materials c. price of goods; number of employees d. total inputs; types of goods
The analysis of Friedman and Phelps can be summarized in the following equation where a is a positive number:
a. Unemployment Rate = Natural Rate of Unemployment - a(Actual Inflation - Expected Inflation). b. Unemployment Rate = Natural Rate of Unemployment - a(Expected Inflation - Actual Inflation). c. Unemployment Rate = Expected Rate of Inflation - a(Actual Inflation - Expected Inflation). d. Unemployment Rate = Actual Rate of Inflation - a(Actual Unemployment - Expected Unemployment).