Banks with excellent credit can borrow ________ from the Federal Reserve.
A. an unlimited amount
B. $1,000,000 per year
C. only an amount equal to their deposits
D. $1,000,000 per day
Answer: A
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Workers and firms are currently expecting the price level to increase from 110 to 114. The Federal Reserve then announces that it will be reducing the growth rate of the money supply
If the Fed's announcement is credible, and firms and workers have rational expectations, describe how the expectations of firms and workers will be affected and how the change in expectations will affect the unemployment rate.
Marginal benefits and total benefits are equal when net total benefits are maximized
Indicate whether the statement is true or false
An increase in business tax rates, combined with a decrease in consumer confidence, would have what effect on aggregate demand? a. AD would increase
b. AD would decrease. c. AD would stay the same. d. AD could either increase or decrease, depending on which change was of a greater magnitude.
The demand curve for a product will shift rightward when the price of a substitute decreases
a. True b. False