Answer the following questions true (T) or false (F)
1. A repurchase agreement is the same as an open market purchase of Treasury securities.
2. Changes in interest rates affect all four components of aggregate demand.
3. Expansionary monetary policy refers to the Fed's increasing the money supply and increasing interest rates to increase real GDP.
1. FALSE
2. FALSE
3. FALSE
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Joan Robinson, author of The Second Crisis of Economic Theory, is quoted as saying, "Keynes did not want anyone to dig holes and fill them." She is pointing out that
A. As far as stabilization objectives are concerned, the level of spending is the only thing that counts. B. The government should not be interfering in the economy because the jobs created are usually unproductive. C. The content of fiscal policy is as important as its aggregate impact on the economy. D. Keynesian economic policies do not work.
Which of the following programs is on-budget?
A. Social Security B. Student loans C. The post office D. Medicare
Relative percentage changes are used in measuring price elasticity of demand, so that
A) it does not matter whether price increases or decreases when calculating the elasticity. B) it does not matter what units are used to measure prices or quantities. C) we always obtain a positive number. D) larger numbers indicate greater responsiveness.
Why don't we see firms tie in the sales of fish filets with the sales of pencils?
A) because the demands for these two goods are positively correlated B) because the demands for these two goods are negatively correlated C) because the demands for these two goods are independent D) It violates the Clean Food Act of 1908.