Deficit financing has been part of U.S. history from the very beginning. The Continental Congress put the country into debt in order to continue its fight for independence from Great Britain. As is done today, Congress issued bonds
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in order to finance the country's war effort. There was considerable controversy after the war regarding the role of the new federal government in absorbing the debts incurred by individual states. Alexander Hamilton, secretary of the Treasury under George Washington, was prominent among those who believed that, by introducing greater flexibility into the money supply, a national debt had the potential to strengthen the economy and the country (chapter 16 page 366)
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Ceteris paribus, the greater the foreign holdings of the U.S. treasury securities:
a. the lower the value of the U.S. dollar in the foreign exchange market. b. the higher the interest rate in the U.S. c. the greater the level of U.S. imports. d. the lower the wealth of the U.S. citizens. e. the lower the tax rate in the U.S. economy.
What is dopamine? With respect to consumer choice, when does dopamine flow increase and when does it decrease?
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When the Fed purchases artwork to decorate the conference room at the Federal Reserve Bank of Kansas City
A) reserves rise, but the monetary base falls. B) reserves fall. C) currency in circulation falls. D) the monetary base rises.
Scott used $4,000,000 from his savings account that paid an annual interest of 5% and a $60,000 loan at an annual interest rate of 5% to purchase a hardware store. After one year, Scott sold the business for $4,100,000 . His accounting profits is:
a. $300,000 b. $100,000 c. $97,000 d. $20,000