Which of the following represents debt monetization?
A) an increase in the budget deficit that is financed by money creation
B) an increase in the budget deficit that is financed by foreigner investors' purchases of domestic bonds
C) an increase in the budget deficit that coincides with a central bank sale of bonds
D) an open market purchase of bonds that results in inflation
E) none of the above
A
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The scientific method refers to the process by which economists and other scientists:
A) plot graphs to illustrate relationships between different economic variables. B) develop models of the world and test those models with data. C) develop models to explain the past but not to predict the future. D) collect data for further use in research.
Suppose that a bank begins with $500 million in deposits and $100 million in reserves and is just meeting its desired reserve ratio. Now suppose a decrease in the required reserve ratio lowers the desired reserve ratio to 10 percent
After the fall in the desired reserve ratio but before the bank makes any changes, the bank's excess reserves are A) 0. B) $400 million. C) $450 million. D) $50 million.
Robert Lucas and his followers have argued that the Philips curve appears to be:
a. a vertical line. b. a horizontal line. c. a negatively-sloped curve. d. a positively-sloped curve.
A negative network externality causes demand to become:
A. unit elastic. B. perfectly inelastic. C. less elastic. D. more elastic.