If the government's expenditures exceeded its receipts, it would likely
a. lend money to a bank or other financial intermediary.
b. borrow money from a bank or other financial intermediary.
c. buy bonds directly from the public.
d. sell bonds directly to the public.
d
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Refer to Figure 15-5. In the figure above, the movement from point A to point B in the money market would be caused by
A) a decrease in real GDP. B) an open market sale of Treasury securities by the Federal Reserve. C) an increase in the required reserve ratio by the Federal Reserve. D) an increase in the price level.
The fraudulent delivery of low quality experience goods at high prices is more likely if
a. interest rates decline b. information about notorious firms is speedily disseminated c. price premiums for allegedly high quality increase d. sellers invest in non-transferable reputation e. none of the above
If there is a shortage in the market for athletic shoes,
a. the price should rise to eliminate the shortage b. inventories of athletic shoes will grow c. demand will decrease to restore equilibrium d. firms will reduce production to restore equilibrium e. supply will increase to restore equilibrium
If the market interest rate equals 8 percent, the opportunity cost of the last new investment project undertaken would approximately be equal to _____
a. zero percent b. 4 percent c. infinity d. 8 percent e. 16 percent