Given that most banks have positive gap and negative durations, banks prefer
A) lower market interest rates.
B) higher market interest rates.
C) higher market fixed rates but lower market floating rates.
D) either higher or lower market interest rates since interest rates have little effect on bank profits.
A
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In the short-run, if the Federal Reserve decreases interest rates, then consumption and investment ________, aggregate expenditure ________, and short-run equilibrium output ________.
A. increase; increases; increases B. increase; increases decreases C. decrease; decreases; decreases D. increase; decreases; decreases
A good definition of the meaning of development is the
a. elimination of absolute poverty. b. improvement in the quality of life. c. fulfillment of the potential of individuals. d. all of the above.
According to the modern Keynesian view,
a. both the IS and the LM curve slopes are in the intermediate or normal range, where both monetary and fiscal policies are effective in controlling income. b. only the IS curve slope is in the intermediate or normal range and, therefore, only fiscal policy is effective in controlling income. c. only the LM curve slope is in the intermediate or normal range and, therefore, only monetary policy is effective in controlling income. d. neither the IS nor the LM curve slopes are in the intermediate or normal range and, therefore, neither monetary nor fiscal policies are effective in controlling income.
Deepening human capital involves
a. increasing the number of workers. b. increasing the number of machines per worker. c. increasing the levels of education per worker. d. using more machines than workers.