In Figure 15.3, the Fed can decrease the equilibrium interest rate from 6 percent to 2 percent by
A. Decreasing the money supply.
B. Selling bonds.
C. Decreasing the reserve requirement.
D. Increasing the discount rate.
Answer: C
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In order to have a principal agent problem, there must be
a. A market economy b. A dictator and a subordinate c. Asymmetric information d. a situation in which the principal and agent have the same objective e. Both c and d are correct
Describe the criticisms about decision making at the IMF and the World Bank
Which types of policies are thought to reflect bias? What types of costs are not considered? What is the fundamental question critics raise about the operations of the international governmental economic institutions?
The tax multiplier is equal
What will be an ideal response?What will be an ideal response?
When smaller political groups wish to have influence in a government with pluralistic voting, they will:
A. drop from races, and consolidate with larger parties. B. stay in political races, in the hopes of swaying the vote away from the candidate the majority favors. C. stay in political races, in the hopes of a miracle. D. drop from races, and campaign instead to sway the vote away from the candidate the majority favors.