Everything else held constant, the vertical section of the supply curve of reserves is lengthened when the
A) discount rate increases.
B) discount rate decreases.
C) federal funds rate rises.
D) federal funds rate falls.
A
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
If the income elasticity of demand for a good is 2, then when income rises 10 percent, the quantity demanded
A) increases 2 percent. B) increases 20 percent. C) decreases 2 percent. D) decreases 20 percent. E) increases 12 percent.
Does correlation always imply causation? Why or why not? Explain with the help of real-life examples
What will be an ideal response?
When you deposit funds in a bank and then the bank lends these funds to a borrower, the bank is engaged in
A) fiduciary investment. B) fraudulent behavior. C) universal banking. D) financial intermediation.