The FOMC directive does not contain a target
A) growth rate for M1.
B) growth rate for M2.
C) growth rate for M3.
D) federal funds interest rate.
A
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Your financial investments consist of U.S. government bonds maturing in twenty years and shares in a start-up internet company. If interest rates on newly-issued government bonds increase, then the price of your bonds will ________ and the price of the shares you own will ________.
A. decrease; not change B. increase; increase C. increase; not change D. decrease; decrease
Which of the following accurately describes the relationship between excess reserves and checkable deposits following the financial crisis of 2007-2009?
A) Excess reserves declined as the excess reserve ratio returned to near zero. B) Excess reserves rose to nearly one-third of checkable deposits. C) Excess reserves approached the same level as checkable deposits. D) Excess reserves exceeded checkable deposits.
As a result of a decrease in the price of gasoline, consumers can afford to buy more gasoline for more driving trips. This is an illustration of
A. consumer sovereignty.
B. the substitution effect.
C. diminishing marginal utility.
D. the income effect.
Compared with the United States, developing countries
A. face geographic conditions that limit productivity. B. have universal health care that prevent the spread of diseases. C. have more political stability. D. have higher levels of educational attainment.