Which of the following examples shows an imperfect information problem with monetary policy?
a. After the government sells bonds, many foreign banks increase their interest rates.
b. After the government increases spending, business confidence in investing increases.
c. The government implements a tax cut after the Fed decreases the money supply.
d. The government’s estimate of MPC is 20 percent too low.
d. The government’s estimate of MPC is 20 percent too low.
You might also like to view...
The one organization that has the power to change the total amount of reserves in the banking system is the
A) Executive Branch of the Federal Government. B) U.S. Treasury. C) Federal Reserve System. D) Congress.
The balance sheet for a commercial bank shows the bank's
a. required reserves as assets and excess reserves as liabilities b. loans as assets and required reserves as liabilities c. loans as assets and demand deposits as liabilities d. demand deposits as assets and loans as liabilities e. excess reserves as assets and required reserves as liabilities
When differences in land quality and access to marketplaces are very large and population grows rapidly, the conditions are ripe for
a. increasing differential and location rents b. decreasing differential and location rents c. decreasing differential rents and increasing location rents d. increasing differential rents and decreasing location rents e. marginal physical product of land to increase
Describe at least three ways that global capital markets are different today from what they were like in the late 19th century
What will be an ideal response?