The country of Zlatan is in serious financial crisis after the banks of the country suffered huge losses. Most of the loans were granted to customers without any proper verification, resulting in a high rate of default. The government decided to create an Office of Thrift Supervision to insure deposited funds and to ensure that banks do not indulge in risky lending. Which of the following is a
likely consequence of this step?
a. Banks will stop purchasing government bonds.
b. Banks will stop keeping a certain amount of their reserves as deposits with the central bank.
c. Banks will want to ensure that the difference between their assets and liabilities is positive.
d. Banks will stop purchasing government bonds.
c
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In November 2008, automobile executives from Ford, GM and Chrysler testified to Congress that their firms needed a $25 billion bailout to prevent bankruptcies. The executives stated that part of the cash would be used to re-design production lines
The $25 billion is ________ and the re-designed production lines are ________. A) financial capital; physical capital B) gross investment; physical capital C) physical capital; financial capital D) net investment; gross investment
If the federal government tries to make fiscal policy sustainable by decreasing expenditure on government capital goods, private capital goods will become ________ productive, and this will result in ________ potential GDP
A) more; lower B) more; higher C) less; lower D) less; higher
On average, persons with more education tend to draw Social Security benefits for a
a. longer period of time than average b. shorter period of time than average c. period of time that is comparable to the U.S. average d. longer period of time if they have a master's degree but a shorter period of time if they have a Ph.D.
Assume that the central bank increases the reserve requirement. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period rises, and nominal value of the domestic currency falls. b. There is not enough information to determine what happens to these two macroeconomic variables. c. The quantity of real loanable funds per time period rises, and nominal value of the domestic currency rises. d. The quantity of real loanable funds per time period rises, and nominal value of the domestic currency remains the same. e. The quantity of real loanable funds per time period falls, and nominal value of the domestic currency rises.