Bruce the Bank Manager can reduce interest rate risk by ________ the duration of the bank's assets to increase their rate sensitivity or, alternatively, ________ the duration of the bank's liabilities
A) shortening; lengthening
B) shortening; shortening
C) lengthening; lengthening
D) lengthening; shortening
A
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How does the unemployment rate fluctuate over the business cycle?
What will be an ideal response?
A sign that the Federal Reserve is moving to lower interest rates would be
A) a reduction in bank reserves. B) an increase in margin requirements. C) a widening gap between the Treasury bill yield and the discount rate. D) a narrowing gap between the Treasury bill yield and the discount rate.
Goods with few available substitutes tend to have inelastic demand curves
a. True b. False Indicate whether the statement is true or false
Which of the following statements is false?
(a) Automatic stabilisers reduce the impact of economic shocks that arise from cyclical fluctuations. (b) Automatic stabilisers are deliberately put in place by government e.g. increase in jobseekers allowance. (c) Automatic stabilisers "kick in" when required and do not require deliberate action by government at the time of the economic shock. (d) All of the above are false.