The annual increase in the dollar value of a financial asset is called the:
A. inflation rate.
B. real rate of return.
C. real interest rate.
D. nominal interest rate.
Answer: D
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Secondary reserves are so called because
A) they can be converted into cash with low transactions costs. B) they are not easily converted into cash, and are, therefore, of secondary importance to banking firms. C) 50% of these assets count toward meeting required reserves. D) they rank second to bank vault cash in importance of bank holdings.
The main fiscal policy challenge for the future in the United States is rising expenditure on
A) transfer programs. B) education. C) national defense. D) the net interest on the federal debt.
Which of the following best defines wealth?
a. The sum of the value of all assets b. The flow of money received c. The number of financial investments d. The amount of debt at any time
Indicate whether each of the following events would lead to depreciation or appreciation of the U.S. dollar under a system of floating exchange rates. a. A drop in U.S. interest rates relative to foreign interest rates b. An increase in the preferences of foreign citizens for U.S. goods c. Faster economic growth in the United States relative to its trading partners d. A decrease in the U.S. money supply e. Rising U.S. inflation relative to foreign inflation
What will be an ideal response?