Answer the following statements true (T) or false (F)
1. If member banks need to borrow reserves, they must do so through the discount window.
2. The discount rate at all Federal Reserve Banks is always identical.
3. The Federal Reserve System is completely independent of the government.
4. Raising the reserve requirement or the discount rate always decreases the money supply.
5. The Fed’s ability to influence the money supply through its open-market operations is independent of a commercial bank’s desire to make loans.
1. FALSE
2. FALSE
3. FALSE
4. FALSE
5. FALSE
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Why were the U.S. government budget deficits of the 1980s and early 1990s so unusual from a historical point of view?
A) It was the first time the U.S. government had ever run deficits. B) In the past, deficits were usually that large only in wartime. C) It was the first time that deficits were accompanied by very high rates of inflation. D) It was the first time that deficits diverted funds from other productive uses, such as investment in modern equipment.
Many economists conclude that in-kind income programs have served to reduce levels of inequality significantly from the levels suggested by aggregate income statistics
a. True b. False Indicate whether the statement is true or false
Mike wants to open his own repair shop, and is considering using his savings of $30,000 to get it started. He is currently earning 3 percent interest on his savings. His friend Bob calls him and asks to borrow $30,000 to start up a bagel shop; Bob offers to pay him 5 percent interest if he loans him the money. If Mike were to use the money to open his own repair shop, how can he accurately account for his costs?
A. Mike must consider the $900 in forgone interest on his savings as an explicit cost. B. Mike must consider the $1,500 in forgone interest from loaning the money to Bob as an implicit cost. C. Mike must consider the $1,500 in forgone interest from loaning the money to Bob as an explicit cost. D. Mike must consider the $900 in forgone interest on his savings as an implicit cost.
In order for spot checks to be effective, they must be:
A. rarely if ever done. B. partaken twice daily. C. performed at regular intervals. D. random in nature.