The reserve requirement refers to:
a. the fraction of deposits that banks are required by the Fed to hold as reserves
b. the amount of gold required to back up all Federal Reserve notes.
c. the requirement that banks reserve part of their lending capacity for small businesses.
d. the requirement that Reserve bank presidents be part of the FOMC.
e. the Treasury deposits held by the Fed.
a
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A business cycle is the:
a. period of time in which expansion and contraction of economic activity are equal. b. period of time in which there are three phases: peak, depression, and recovery. c. recurring growth and decline in real GDP. d. period of time in which a business is established and ceases operations.
Economist A believes that the expansionary fiscal policy --- in the form of increased government spending --- should be implemented to remove the economy from the recessionary gap it is currently in. This economist probably believes that
A) crowding out will not present much of a problem. B) crowding out will be a big problem. C) crowding out is irrelevant to the degree of effectiveness of fiscal policy. D) zero crowding out is unlikely. E) c and d
Why did the U.S. government use rationing for some foods and consumer goods during World War II?
a. to guarantee each civilian a minimum standard of living in wartime b. to keep sellers from raising prices on necessary goods c. to earn more money to support the military d. because the English government had also declared rationing
The smaller the country, the more its spending tends to affect other countries.
Answer the following statement true (T) or false (F)