When the Fed makes a discount loan, the impact on the Fed's balance sheet will reflect:
A. a decrease in assets and liabilities.
B. an increase in assets and a decrease in liabilities.
C. no change in liabilities but an increase in assets.
D. an increase in assets and liabilities.
Answer: D
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To prevent bank runs and the consequent bank failures, the United States established the ________ in 1934 to provide deposit insurance
A) FDIC B) SEC C) Federal Reserve D) ATM
The central bank in the New Keynesian model pursues a policy of
A) fixed money supply. B) inflation between 2 and 3%. C) zero inflation. D) targeting the market interest rate.
Studies find that mutual fund managers who do well in one year are likely to do well the next year
a. True b. False Indicate whether the statement is true or false
Someone notices that sunspot activity is high just prior to recessions and concludes that sunspots cause recessions. This person has:
A. confused association and causation. B. misunderstood the Ceteris paribus assumption. C. used normative economics to answer a positive question. D. built an untestable model.