What is fractional reserve banking?
A system in which banks keep only a percentage of their deposits on reserve as cash
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In an expansion, federal tax revenues increase proportionally more than real GDP without the need for any government policy. This increase is an example of
A) the effect of deficit spending. B) discretionary fiscal policy. C) automatic fiscal policy. D) automatic monetary policy. E) discretionary monetary policy.
In the short-run, real GDP can be greater than or less than potential GDP because in the short run the
A) money wage rate is fixed. B) quantity of capital is fixed. C) full-employment level of employment is fixed. D) price level is fixed.
As the interest rate increases, the present value of future sums decreases, so firms will find fewer investment projects profitable
a. True b. False Indicate whether the statement is true or false
In 2015, the total income of all U.S. residents was about
a. $10 billion. b. $16 billion. c. $10 trillion. d. $16 trillion.