Why are so few state chartered banks members of the Federal Reserve System?
What will be an ideal response?
The reason for the low percentage of state banks belonging to the Fed goes back to the years prior to 1980, when only member banks had to hold reserves in the form of deposits at the Fed in the non-interest bearing accounts. Non-member banks could hold reserves in interest bearing securities, such as U.S. treasury bills. In effect, this placed a tax on Fed membership.
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If the federal government tries to make fiscal policy sustainable by increasing seigniorage, the economy would experience ________ and will result in ________ potential GDP
A) a decrease in the growth rate of the money supply; lower B) an increase in the growth rate of the money supply; higher C) an increase in inflation; lower D) a decrease in the real interest rate; higher
Ten cases of spring water are sold for $6 each, and the marginal product of the last unit of labor is 5 . If the price of a case increases from $6 to $8, then the marginal revenue product of the last unit of labor would
a. decrease by $10 b. increase by $40 c. decrease by $30 d. increase by $10 e. not change
Which of the following is true of the Golden Age of fiscal policy of the 1960s? a. Fiscal policy was used to prevent output from expanding in 1964
b. Lyndon B. Johnson cut income tax rates to reduce inflationary pressures in the economy c. A tax cut was introduced to increase savings and unemployment. d. A tax cut increased disposable income and consumption. e. The unemployment rate rose by 5 percent for the first time in seven years
The productivity speed-up in the United States began in the
a. mid 1970s. b. mid 1980s. c. mid 1990s. d. beginning of 2001.