What is NOT an interest bearing asset of commercial banks?
A. required reserves.
B. securities.
C. loans.
D. All of the above
Required reserves
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Explain the output and factor substitution effects of an increase in the price of capital on theDemand for labor by a firm that produces output using both capital and labor
What will be an ideal response?
Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and monetary base in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. The real risk-free interest rate rises and monetary base rises. b. The real risk-free interest rate falls and monetary base falls. c. The real risk-free interest rate rises and monetary base falls. d. The real risk-free interest rate and monetary base remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Which of the following is the most accurate statement?
a. In the 1970s, the late 1980s, 1990s, and 2000s, the GDP deflator and the CPI both showed high rates of inflation. b. In the 1970s, both the GDP deflator and the consumer price index showed high rates of inflation, and in the late 1980s, 1990s, and 2000s, both measures showed low rates of inflation. c. In the 1970s, both the GDP deflator and the consumer price index showed low rates of inflation, and in the late 1980s, 1990s, and 2000s, both measures showed high rates of inflation. d. In the 1970s, the late 1980s, 1990s, and 2000s, the GDP deflator and the CPI both showed low rates of inflation.
A free market economy is one in which ________.
A) the government or other centralized group determines what to produce B) individuals determine what to produce with some level of government involvement C) a tightly knit social network barters and trades for goods at a market D) individuals and private firms make decisions based on consumer needs and wants E) privately owned, profit-seeking enterprises are converted to government-owned production and services