What is the term referring to the situation when a central bank makes short-term loans available in situations of severe financial panic or stress?
a. deposit insurance
b. lender of last resort
c. reserve insurance
d. Fed loans
b. lender of last resort
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If the Federal Reserve wants to increase the money supply, it should:
A. increase reserve requirements. B. increase the interest that it pays on reserves. C. increase the discount rate. D. conduct open-market purchases.
Why should the GDP accounts matter to the average citizen?
Answer the following statement(s) true (T) or false (F)
1. If the mpc is 0.8 and government spending increases by $10 billion, equilibrium Y will increase by $50 billion. 2. Decreasing taxes is an example of expansionary fiscal policy. 3. Most of the U.S. government debt is owed to foreign countries. 4. The HDI is an index of well-being. 5. The deficit is the sum of yearly government debts since 1776.
Answer the following questions true (T) or false (F)
1. The term "market" refers to trading arrangements by which buyers and sellers come together. 2. The additional cost to a producer of hiring an additional unit of labor is called the marginal cost. 3. Marginal benefit refers to the additional benefit that your activity provides to you.