Which of the following is true if all the national debt were owned internally?
a. The federal government would not need to refinance the national debt.
b. The federal government would not need to worry about raising taxes to pay interest on the national debt.
c. We would still be concerned about the effect on the distribution of income from interest payments on the national debt.
d. All of these are true.
c
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The two functions that are critical to the key role that commercial banks play in stabilizing the economy are accepting deposits and making loans
Indicate whether the statement is true or false
Producers typically face increasing marginal costs of production. Thus, their production possibilities frontier would
A) slope upward. B) bend inward. C) bend outward. D) appear as a straight line.
Suppose Laqueta deposits $10,000 of cash into a checking account at a commercial bank. The immediate effect is
a. a $10,000 decrease in the M1 money supply. b. no change in the M1 money supply, but in the future, the M1 money supply will tend to decrease because the bank now has excess reserves. c. no change in the M1 money supply, but in the future, the M1 money supply will tend to expand because the bank now has excess reserves. d. a $10,000 increase in the M1 money supply.
Use the following diagram to answer the next question.
In the diagram, solid arrows reflect real flows and broken arrows are monetary flows. Flow (7) might represent
A. wage payments to public school teachers. B. subsidies to corporations to stimulate exports. C. a transfer payment to disabled persons. D. the U.S. Bureau of Engraving and Printing's expenditures for paper.