The percentage of a bank's total deposits held in reserves, either as cash in the vault or as deposits at the local Federal Reserve bank, is:
a) the reserve ratio.
b) the reserve requirement.
c) excess reserves.
d) the money ratio.
Ans: a) the reserve ratio.
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According to the short-run Phillips Curve, there is a trade-off between
(a) interest rates and inflation (b) the growth of the money supply and interest rates (c) unemployment and economic growth (d) inflation and unemployment (e) economic growth and interest rates
An example of automatic stabilizers is
A. government spending falling in a recession. B. deficit targeting. C. taxes falling in a recession. D. all of the above.
If production technologies are homothetic, all cost-minimizing production plans lie on the same ray from the origin for a given set of input prices.
Answer the following statement true (T) or false (F)
An increase in government spending increases the supply of money in our economy
Indicate whether the statement is true or false