When the Federal Reserve began paying interest on excess reserves, the effect on monetary policy was
A. making open market operations less effective.
B. adding a new tool to monetary policy.
C. reducing the effect of a change in reserve requirements.
D. eliminated the need for the Federal Funds Market.
B. adding a new tool to monetary policy.
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The majority of federal government spending on income transfers would be classified as welfare
Indicate whether the statement is true or false
Aggregate demand includes: a. the demand for intermediate goods and final goods
b. all monetary and nonmonetary transactions. c. the demand for investment, including stocks, bonds, and gold. d. the demand for final goods and services.
The growing federal budget deficit in the 1980s was accompanied by a
a. growing trade surplus. b. growing trade deficit. c. shrinking trade deficit. d. shrinking capital account surplus.
A key assumption in the segmented markets theory is that bonds of different maturities
A) are not substitutes at all. B) are perfect substitutes. C) are substitutes only if the investor is given a premium incentive. D) are substitutes but not perfect substitutes.