In contrast to investment, consumption is:
A. relatively unstable.
B. relatively stable.
C. measurable.
D. unmeasurable.
B. relatively stable.
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Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and current international transactions in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period rises, and current international transactions become more negative (or less positive). b. There is not enough information to determine what happens to these two macroeconomic variables. c. The quantity of real loanable funds per time period and current international transactions remain the same. d. The quantity of real loanable funds per time period rises, and current international transactions remain the same. e. The quantity of real loanable funds per time period rises, and current international transactions become more positive (or less negative).
The members of the Federal Reserve's Board of Governors
a. are appointed by the president of the U.S. and confirmed by the U.S. Senate. b. serve six-year terms. c. are also the presidents of the regional Federal Reserve banks. d. share power equally, with no governor having any more influence or power than any other governor.
Cutting the interest rate paid on reserves should make banks
A. less willing to meet the margin requirement. B. more willing to use their funds for lending. C. more willing to meet the margin requirement. D. less willing to use their funds for lending.
As the federal funds rate changes, other interest rates tend to move in the same direction
Indicate whether the statement is true or false