If the federal government were to run a budget deficit, this would
a. increase the size of the national debt.
b. reduce the size of the national debt.
c. leave the size of the national debt unchanged.
d. increase the national debt only if the government also expands the supply of money.
A
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If two variables have the same rate of growth over the long run, their ratio will:
A) remain constant over the long run. B) initially decrease and then increase. C) decrease over the long run. D) increase over the long run.
The Fed's decision to concentrate more on interest rates in conducting near-term monetary policy
A) was the result of deregulation and innovation in financial markets. B) was necessitated by the inability to identify a stable demand for money. C) is sometimes misrepresented by the media as the Fed "setting" interest rates. D) all of the above.
When the U.S. real interest rate falls ________
A) U.S. dollar assets earn a higher return relative to foreign assets B) it makes U.S. exports more expensive in foreign currencies C) imports will decrease D) all of the above E) none of the above
The Fed can force the banking system to decrease the money supply by tightening monetary policy, but it cannot force the banking system to increase the money supply by loosening monetary policy
a. True b. False Indicate whether the statement is true or false