Which of the following is NOT a component of gross domestic product?
A) purchases by consumers of used goods B) government purchases
C) net exports D) purchases by consumers of finished goods
A
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The federal funds rate is
a. the Fed's discount rate b. the difference between the discount rate that the Fed charges banks and the primerate that banks charge their borrowers c. the interest rate on loans made by banks in the federal funds market d. the interest rate on loans made by the Fed in the federal funds market e. the interest rate banks pay to the Fed for belonging to the FDIC
A labor contract provides for a first-year wage of $15 per hour, and specifies that the real wage will rise by 2 percent in the second year of the contract. The CPI is 1.00 in the first year and 1.09 in the second year. What dollar wage must be paid in the second year?
A. $15.30 B. $16.68 C. $16.09 D. $16.45
When interest rates are near zero and traditional monetary policy is ineffective, the Fed or other central bank may resort to a strategy referred to as quantitative easing. What does this strategy involve?
A) allowing interest rates to rise slowly by providing substantial reserves for as long as is necessary to avoid inflation B) reducing the money supply to raise the interest rates slowly without discouraging spending C) keeping interest rates very low by providing substantial reserves for as long as is necessary to avoid deflation and encourage spending D) increasing the money supply and interest rates at a constant rate to stimulate economic activity
Which of the following scenarios would be most likely to cause the shift in the demand of loanable funds from D1 to D0, shown in the following diagram?
a) A decrease in investment tax credits. b) A technological advancement that increases productivity. c) An increase in business taxes. d) The expansion of business regulations.