Under Temporary Aid to Needy Families (TANF), a recipient loses their cash benefits when they get a job.
Answer the following statement true (T) or false (F)
False
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In the money market, if the interest rate exceeds the equilibrium interest, there is a surplus of money. How is the surplus eliminated?
A) People buy bonds to rid themselves of the surplus money, bidding up their price and pushing interest rates down. B) Banks will lend out the surplus, lowering interest rates. C) The Federal Reserve will destroy currency, reducing the quantity of money. D) The high interest rate increases the demand for money, eliminating the surplus.
Which of the following inputs is most likely to be "fixed" in the short run?
A) Labor. B) Capital. C) Energy. D) Raw Material.
One of the major weaknesses of the Federal Reserve Bank of St. Louis econometric model was that it
A) was large and cumbersome. B) was limited to analyzing an economy with substantial unemployment. C) did not specify the categories of private spending that were affected by monetary policy. D) included a government spending multiplier that was clearly too high.
In the IS model, assuming that the real interest rate does not change, an increase in ________ leads to an increase in equilibrium saving by households
A) autonomous consumption B) taxes C) financial frictions D) all of the above E) none of the above