You can also think of interest as:
A. the cost of inflation.
B. the price of borrowing per dollar
C. the time it takes a bond to mature.
D. All of these statements are true.
B. the price of borrowing per dollar
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Paying interest on the reserves of commercial banks kept with the central bank allows the Fed to essentially place a floor on the federal funds rate
a. True b. False Indicate whether the statement is true or false
One reason consumers were able to assume an increasing amount of household debt during the 2000s is because:
A. interest rates were so low that it made borrowing easier. B. interest rates were so low that people found it very easy to save their extra income. C. even though interest rates were high, the inflated values of homes allowed them to afford it. D. even though interest rates were high, the herd instinct gave people a false confidence in their future wealth.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The economy is currently at Point B. The opportunity cost of moving from Point B to Point A is the
A. 120 LCD TVs that must be forgone to produce 20 additional OLED TVs. B. 30 LCD TVs that must be forgone to produce 40 additional OLED TVs. C. 20 OLED TVs that must be forgone to produce 30 additional LCD TVs. D. 40 OLED TVs that must be forgone to produce 120 additional LCD TVs.
Disposable personal income is personal income minus personal taxes.
Answer the following statement true (T) or false (F)