Answer the following questions true (T) or false (F)
1. Rising nominal GDP will increase the demand for money and short-term interest rates.
2. Buying a house during a recession may be a good idea if your job seems secure because the Federal Reserve often lowers interest rates during a recession.
3. In 2008, the Fed began paying banks interest on their reserve holdings.
1. TRUE
2. TRUE
3. TRUE
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Explanations for the high saving rate in China consistent with the life-cycle reason for saving include:
A. lifetime employment. B. low unemployment rates in Japan. C. the desire to leave resources to children who provide support and attention to parents in their old age. D. China's social safety net provides most people little in the way of retirement income.
Profit is
A. Possible only with technical efficiency. B. The difference between total cost and variable cost. C. Earned at all points along the production function. D. The difference between total revenue and total cost.
Why are public goods provided by the government, rather than by the private sector?
A. because it would be difficult for a private sector firm to make a profit providing a public good, since consumers who benefit would not have to pay for it B. because they are large-scale projects that require the kind of financing only governments can generate through the issuance of bonds C. because private sector firms do not have the foresight to plan for public goods D. because no one really benefits from public goods
Refer to the information provided in Figure 34.4 below to answer the question(s) that follow.
Figure 34.4Refer to Figure 34.4. The demand and supply of pounds are D2 and S1. A decrease in British demand for U.S. exports, ceteris paribus, could
A. increase the equilibrium quantity from 300 to 400 pounds. B. decrease the exchange rate ($/pound) to $1.50. C. increase the exchange rate ($/pound) to $2.00. D. increase the demand for pounds from D2 to D1.