In its role as bank for the U.S. government, the Federal Reserve performs all of the following services, except:
A. maintaining the U.S. Treasury's bank account.
B. managing U.S. Treasury borrowings.
C. issuing new currency.
D. making discount loans.
Answer: D
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
Banks have responded to new regulations resulting from the Dodd-Frank Act in all of the following ways EXCEPT:
A) raising minimum balances on free checking accounts B) closing branches in low-income neighborhoods C) raising overdraft fees D) increased marketing of securities and financial advice to high-income customers
If the Mexican economy is using all of its available resources to produce goods, it means that the Mexican economy is producing at a point
a. located at one of the endpoints of the production possibilities curve b. beyond (exterior to) its production possibilities curve c. on its production possibilities curve d. inside (interior to) its production possibilities curve e. closer to the origin than its production possibilities curve
Other things equal, an increase of Treasury bonds from $100 billion to $120 billion in the economy would:
A. not change the size of the public debt.
B. increase the public debt from $460 billion to $480 billion.
C. increase the public debt from $400 billion to $420 billion.
D. decrease the public debt by $20 billion.