The ratio of a bank's total reserves to its total transactions deposits is known as the
A. Reserve ratio.
B. Deposit ratio.
C. Excess reserves.
D. Required reserves.
Answer: A
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In early 2008, the housing crisis and rising oil prices increased the risk of recession in the United States. What fiscal policy action was taken by Congress and the president to counter these events?
A) Income taxes were raised to reduce the federal budget deficit and reduce interest rates. B) Taxpayers were given rebates on taxes they already paid. C) There was an increase in government spending on defense and unemployment compensation. D) The Federal Reserve cut its target for the federal funds rate.
Assuming the economy is starting at the natural rate of output and everything else held constant, the effect of ________ in aggregate ________ is a rise in both inflation and output in the short-run,
but in the long-run the only effect is a rise in inflation. A) a decrease; supply B) a decrease; demand C) an increase; supply D) an increase; demand
The economy is considered to be at full employment when
a. the actual rate of unemployment is less than the natural rate b. the leading economic indicators are unchanged for two consecutive quarters c. structural unemployment is zero d. frictional plus structural unemployment is less than the natural rate e. the rate of cyclical unemployment is zero
The make-up of the Governing Council of the European Central Bank and the methods used to calculate price stability for the monetary system can potentially result in:
A. a policy for the median country rather than a policy well suited for any country. B. monetary policy that is well suited for some countries but ill-suited for others. C. small countries having undue influence on the decisions of the Council. D. all of the results listed are possible.