The nominal (money) rate of interest
a. is the real rate of interest plus the inflationary premium.
b. can be expected to decline as inflation accelerates.
c. fell to historic lows during the 1970s when the United States experienced double-digit rates of inflation.
d. can be expected to increase when the government is running a budget surplus.
A
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The productive resource that includes all the "gifts of nature" is called
A) land. B) labor. C) capital. D) entrepreneurshi
A government-imposed restriction on the quantity of a specific good that may be imported to and sold in the United States is called a
A) tariff system. B) quota system. C) reverse-trade system. D) union trade system.
If the Fed pursues expansionary monetary policy then
a. the money supply will decrease, interest rates will rise and GDP will fall. b. the money supply will decrease, interest rates will fall and GDP will fall. c. the money supply will increase, interest rates will rise and GDP will rise. d. the money supply will increase, interest rates will fall and GDP will rise.
One of the cash items included on the asset side of banks' balance sheets is reserves. What makes up reserves and what is their purpose?
What will be an ideal response?