When the Fed lowers the discount rate, it makes it:
A. cheaper for banks to borrow from each other.
B. cheaper for banks to obtain additional reserves by borrowing from the Fed.
C. more difficult for banks to accept deposits.
D. more difficult for banks to extend loans.
Answer: B
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The value of corporate stocks and bonds traded in a given year is ________.
A. included in the calculation of GDP because it is a component of gross investment B. included in the calculation of net private domestic investment C. excluded from the calculation of GDP because it does not represent new production D. included in the calculation of gross private domestic investment
A graph shows the price of a pound of cucumbers on the vertical axis and the quantity of new cars sold by GM on the horizontal axis. The price of a pound of cucumbers remains constant as the quantity of new cars sold increases
The graph of these data is A) a horizontal line. B) a vertical line. C) a curve with a maximum. D) a positively-sloped line.
Suppose the Okun's law coefficient is 2, the full-employment level of output is $5000 billion, and the natural rate of unemployment is 6%
(a) What is the current level of output if the current unemployment rate is 8%? (b) Suppose the unemployment rate falls to 5%; what is the current level of output? (c) Suppose structural changes in the economy raise the natural rate of unemployment to 7%, and lower the full-employment level of output to $4800 billion. If the current unemployment rate is 8%, what is the current level of output?
The demand curve for Japanese yen is downward sloping because when the exchange rate (measured in dollars per yen) falls,
a. Japanese goods become relatively cheaper so foreigners buy more of them and need more yen to do so. b. foreigners need more dollars to buy one yen so they can now afford more Japanese goods. c. the yen demand curve shifts to the right as foreigners try to buy more Japanese goods. d. the dollar becomes weaker and this reduces the strength of both economies. e. everyone wants fewer yen because they have lost some of their underlying value.