Expansionary monetary policy is achieved by:
A) decreasing the amount of bank reserves and lowering the federal funds rate.
B) decreasing the amount of bank reserves and raising the federal funds rate.
C) increasing the amount of bank reserves and lowering the federal funds rate.
D) increasing the amount of bank reserves and raising the federal funds rate.
C
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When the Federal Reserve lends reserves to depository institutions, it charges them interest. That interest rate is called the
A) federal funds rate. B) loan rate. C) prime rate. D) discount rate.
As long as marginal cost is below average cost, average cost will be:
a. falling. b. rising. c. constant. d. changing in a direction that cannot be determined without more information.
When economists talk about a balance of payments "deficit," they refer to:
a. a net balance in the balance of payments that is less than zero. b. a condition in which total credits exceed total debits in the balance of payments. c. a deficit in one of the sub-accounts of the balance of payments. d. a disequilibrium in the foreign exchange market. e. a net loss in the trade of international goods and services.
Refer to the information provided in Table 24.8 below to answer the question(s) that follow.Table 24.8All Figures in Billions of DollarsOutput (Income)Net TaxesConsumption Spending (C = 100 + 0.9Yd)SavingsPlannedInvestment PurchasesGovernment Spending2,6001002,3501501502002,8001002,5301701502003,0001002,7101901502003,2001002,8902101502003,4001003,0702301502003,6001003,2502501502003,8001003,430270150200Refer to Table 24.8. If taxes are reduced from $100 billion to $50 billion, the new equilibrium level of output is
A. $4,050 billion. B. $3,850 billion. C. $2,100 billion. D. $1,600 billion.