If a goal of a nation's residents is to increase marginal productivity, they should increase
A) expenditures on education.
B) the inheritance tax.
C) exports.
D) the marginal propensity to consume.
A
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Everything else held constant, if the tax-exempt status of municipal bonds were eliminated, then
A) the interest rates on municipal bonds would still be less than the interest rate on Treasury bonds. B) the interest rate on municipal bonds would equal the rate on Treasury bonds. C) the interest rate on municipal bonds would exceed the rate on Treasury bonds. D) the interest rates on municipal, Treasury, and corporate bonds would all increase.
In the simple deposit expansion model, an expansion in checkable deposits of $1,000 when the required reserve ratio is equal to 20 percent implies that the Fed
A) sold $200 in government bonds. B) sold $500 in government bonds. C) purchased $200 in government bonds. D) purchased $500 in government bonds.
The rationing function of prices means that
A) government is responsible for setting the prices of basic foods. B) all goods and services are produced by large firms. C) businesses determine what goods consumers should purchase. D) buyers and sellers synchronize their decisions through the price system.
If the Fed were to allow unemployment to remain at a higher level than NAIRU:
A. It would lead to deflation. B. the dual mandate would be violated. C. they would fail to maintain full employment. D. All of these statements are true.