Public choice theory assumes that government makes optimal policies to respond to the shortcomings of private markets
a. True
b. False
B
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Unemployment
a. usually decreases whenever nominal GDP decreases. b. usually increases whenever real GDP decreases. c. usually decreases whenever nominal GDP increases. d. usually increases whenever the price level increases.
For banks, the central bank acting as a lender of last resort helps to reinforce the effect of deposit insurance and to reassure bank customers that they will not ___________ their money.
a. access b. spend c. find d. lose
Martha needs to acquire funds in order to expand her bakery. She does not want to give up control of her business, but her credit score is weak due to the recent foreclosure of her house. What should Martha do to acquire these funds?
a) Issue stock to willing investors. b) Borrow money from her local bank. c) Issue bonds to willing investors. d) She should do all of the above.
Time lags that often erode effectiveness of monetary and fiscal policy measures represent
A. the foreign response to price changes. B. delays in the response of the economy to stabilization policy. C. the change in export and import prices. D. the change in exchange rates.