The interest rate that banks charge other banks for overnight loans is the
A) prime rate.
B) discount rate.
C) federal funds rate.
D) Treasury bill rate.
Answer: C
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In the basic Keynesian model, a decrease in government purchases:
A. reduces potential output. B. increases potential output. C. increases short-run equilibrium output. D. reduces short-run equilibrium output.
In the long run, the real interest rate is 3 percent, real GDP grows at 4 percent, velocity is constant, and the quantity of money grows at 8 percent. The nominal interest rate is
A) 7 percent. B) 12 percent. C) 10 percent. D) 8 percent. E) 6 percent.
The percent of disposable income that consumers have to pay for their debt is called:
A. a debtor's mark. B. debt service. C. the cost of debt. D. debt accountability.
The virtual currency battle between Facebook and Zynga reminds us that:
a. Once a company starts a virtual currency, it is difficult and costly to abolish the currency. For nations, the same is true. Countries, like Greece, that entered the European Monetary Union now find it very difficult and costly to abandon the euro. b. Companies that start virtual currencies can abolish them rather quickly, which stands in stark contrast to countries, like Greece, that entered the European Monetary Union but now find it difficult and costly to abandon the euro. c. Companies that start virtual currencies are like countries, such as Greece, that entered the European Monetary Union. In both cases, it appears relatively easy to abandon the virtual currency and currency area. d. Countries, like Greece, that entered the European Monetary Union now find it relatively easy and inexpensive to abandon the euro. This stands in stark contrast to companies that start virtual currencies and wish to abolish them.