The discount rate is the interest ________.
A. rate at which commercial banks lend to the public
B. rate at which the central banks lend to the U.S. Treasury
C. rate at which the Federal Reserve Banks lend to commercial banks
D. yield on long-term government bonds
Answer: C
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In the simple circular flow model, the funds received by a carmaker when it sells a car goes to
A) only the owners of the carmaker. B) the owners of all of the resources used to make the car. C) the workers who helped build the car. D) the owners of firms who sold materials to the carmaker, and the rest stays with the firm.
The above figure shows the total revenue curve for Dizzy Discs. The demand curve for CDs sold by Dizzy Discs
A) has negative slope. B) has positive slope. C) is horizontal. D) is vertical.
If the World Bank lends $10 million to the government of Fiji to develop new sugar cane fields, that would be seen on Fiji’s international balance of payments as a
a. unilateral transfer. b. settlement account entry. c. financial account entry. d. service transaction in the current account.
If the market price rises from P0 to P2 in the above figure, then there is a
A. surplus equal to the distance Q0, Q2. B. shortage equal to the distance Q0, Q2. C. shortage equal to the distance Q1, Q2. D. surplus equal to the distance Q1, Q2.