The extremely low savings rate in the United States has forced us to borrow almost $____ billion a day to finance our federal budget deficit and trade deficit.
A. 1
B. 2
C. 3
D. 4
B. 2
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A change in the equilibrium real interest rate may result from ________
A) an autonomous monetary policy B) a change in the central bank's target inflation rate C) a change in expected inflation D) all of the above E) none of the above
Assume that fewer businesses offer new bonds to raise investment funds when government borrowing increases interest rates. This would be an example of:
a. Ricardian equivalence. b. overestimating the tax multiplier. c. crowding out. d. increased consumption. e. the balanced-budget multiplier.
If the Fed wanted to expand the money supply as part of an antirecession strategy, it could
a. increase the interest rate paid on excess reserves encouraging banks to extend more loans. b. decrease the interest rate paid on excess reserves encouraging banks to extend more loans. c. decrease the interest rate paid on excess reserves encouraging banks to hold excess reserves rather than extend more loans. d. increase the interest rate paid on excess reserves encouraging banks to hold excess reserves rather than extend more loans.
Your father tells you he earned $1.50 per hour when he was 16 in 1969 . Given that the CPI was 36.0 in 1969 and 215 in 2008, how much would you have to earn in 2008 in order to have the same real wage as your father in 1969?
a. $1.50 b. $5.00 c. $8.95 d. $15.00