Of the three motives for the demand for money recognized by John Maynard Keynes, which one is very sensitive to changes in interest rate?
A. Transactions
B. Medium of exchange
C. Speculative
D. Precautionary
C. Speculative
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Describe the four distinct tools of policy that the Federal Reserve can use to influence the money supply. How would the Fed use each of these tools to either increase or decrease the money supply?
What will be an ideal response?
In the United States, the government coordinates most of the economic activity
Indicate whether the statement is true or false
Assume that the currency—deposit ratio is 0.3 and the reserve—deposit ratio is 0.2. What is the money multiplier?
A) 1.5 B) 2.0 C) 2.6 D) 5.0
The personal distribution of income shows
A) that labor receives the largest percentage of total income.
B) how profit accounts for the largest fraction of total income.
C) that the richest 20 percent of households receive 23 percent of total income.
D) that interest accounts for most of the income of the richest 20 percent of households.
E) that the poorest 20 percent of households receive less than 4 percent of total income.