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.
Answer: B
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A bank has no excess reserves. Then it receives a new deposit for $100,000. If it has a desired reserve ratio of 20 percent, by how much can it increase its loans?
A) $20,000 B) $80,000 C) $120,000 D) $180,000
If the economy is in long run equilibrium and aggregate demand increases, then in the short run
A) nothing happens because the economy is in long run equilibrium. B) the price level rises and real GDP does not change. C) real GDP increases and the price level does not change. D) the price level rises and real GDP increases.
Renee plans to graduate and enter the job market in the spring. Economists are forecasting a recession during the spring. As a result, she
a. is happy because unemployment rates are low during a recession b. is happy because salaries are usually higher during a recession c. does not care because the availability of jobs is not affected by whether there is a recession d. is unhappy because it is generally difficult to find a job during a recession e. favors increasing taxes to help head off the recession
Which of the following correctly defines the interest rate?
a. The rate at which households are interested in new consumer products, measured on a scale from 0 to 100. b. The extent to which viewers pay attention to television advertising, measured as a fraction of 100 percent. c. The extent to which news stories affect media consumers, measured on a 1-10 scale. d. The amount of money paid per year to savers as a percentage of the amount saved.