If the Treasury finances an expenditure by borrowing from the Fed, the money supply
A) and bank reserves fall.
B) and bank reserves rise.
C) rises while bank reserves remain unchanged.
D) remains unchanged as bank reserves rise.
B
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Free trade
A) helps economic growth by increasing tariffs. B) hurts economic growth because foreigners are not bound by the same patent laws as we are. C) helps economic growth by encouraging the sharing of technology and industrial ideas. D) hurts economic growth because foreign countries can produce goods with lower labor costs.
Explain the three components of the balance of payments accounts. What must these three balances sum to?
What will be an ideal response?
During most of the time in recent decades, the domestic government sector was
A) a net borrower. B) a net lender. C) neither a borrower nor a lender. D) a major factor in keeping real interest rates low.
If the demand for a product remains the same and the supply falls,
A. both the market clearing price and the equilibrium quantity will rise. B. the market clearing price will rise and the equilibrium quantity will fall. C. both the market clearing price and the equilibrium quantity will fall. D. the market clearing price will fall and the equilibrium quantity will rise.