If a recession were to reduce the demand for loans, ceteris paribus,
A) the interest rate will increase.
B) the interest rate will not change.
C) the interest rate will decrease.
D) the number of loans will increase.
C
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Proponents of a balanced budget amendment argue that the private advantages that each of us realizes from spending on our government programs are paid for almost entirely by other taxpayers
a. True b. False Indicate whether the statement is true or false
Assume the required reserve ratio is 20 percent and the FOMC orders an open market purchase of $100 million in government securities from member banks. If the oversimplified money multiplier is assumed, then the money supply will
a. increase by $500 million. b. increase by $100 million. c. decrease by $100 million. d. decrease by $500 million.
If Congress passes legislation to cut taxes and increase government spending to counter the effects of a severe recession, this would be an example of a(n):
A. expansionary fiscal policy. B. budget surplus. C. cyclically adjusted budget. D. contractionary fiscal policy.
A change in the reserve requirement changes
A) the monetary base. B) the money multiplier. C) the discount rate. D) all of the above E) none of the above