The Fed can offset the effects of an increase in float by engaging in
A) a repurchase agreement.
B) a matched sale-purchase transaction.
C) an interest rate swap.
D) an open market purchase.
B
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Which of the following serves as the central bank for the United States?
A) the Federal Deposit Insurance Corporation B) the U.S. Treasury Department C) the Federal Reserve System D) the World Bank
An increase in government spending financed by borrowing changes people's expectations about future taxation such that current consumption expenditures
a. fall. The increase in expenditures makes it likely that future taxes will create smaller distortions. b. fall. The increase in expenditures makes it likely that future taxes will create larger distortions. c. rise. The increase in expenditures makes it likely that future taxes will create smaller distortions. d. rise. The increase in expenditures makes it likely that future taxes will create larger distortions.
The misperceptions theory of the short-run aggregate supply curve says that the quantity of output supplied will decrease if the price level
a) increases by less than expected so that firms believe the relative price of their output has decreased. b) increases by less than expected so that firms believe the relative price of their output has increased. c) increases by more than expected so that firms believe the relative price of their output has increased. d) increases by more than expected so that firms believe the relative price of their output has decreased.
Refer to Figure 13A.1. When the economy reaches K:
A. depreciation equals saving. B. depreciation is zero. C. capital stock increases. D. economic growth through capital deepening continues to increase.