Open-market operations, changes in reserve requirements, changes in the discount rate, and changes in the interest rate on reserves are known as
A. derivatives.
B. intermediate targets.
C. goals.
D. instruments.
Answer: D
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The best definition for economic growth is
A) a sustained expansion of production possibilities measured as the increase in real GDP over a given period. B) a sustained expansion of production possibilities measured as the increase in nominal GDP over a given period. C) a sustained expansion of consumption goods over a given period. D) a sustained expansion of production goods over a given period.
If the government creates a system of pollution permits, firms with low marginal costs of reducing pollution will
A) buy permits from other firms. B) sell permits to other firms. C) hold on to the permits they have been issued and not attempt to buy more. D) not be issued permits.
Changing the rate at which the central bank makes loans counts as:
A) fiscal policy. B) monetary policy. C) neither fiscal nor monetary policy. D) both fiscal and monetary policy.
The relationship in the economy between consumption and income is called _____
Fill in the blank(s) with the appropriate word(s).