All of the following are true if a bank in Los Angeles borrows federal funds from a bank in San Francisco except
A. The money multiplier increases for the banking system.
B. Lending potential goes up for the Los Angeles bank.
C. Lending potential for the banking system does not change.
D. Lending potential goes down for the San Francisco bank.
Answer: A
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If there is a dollar-for-dollar direct expenditure offset, then
A) increases in aggregate demand will also increase long-run aggregate supply. B) increases in government spending will not increase aggregate demand. C) increases in aggregate demand will increase the price level, but leave real output unchanged. D) increases in aggregate demand will increase real output, but leave the price level unchanged.
When people become unemployed because of a higher minimum wage, this type of unemployment is called:
a. frictional. b. structural. c. cyclical. d. abnormal.
Both parties gain in a voluntary exchange.
Answer the following statement true (T) or false (F)
If Mike buys a bond today for $400 that pays him $500 in one year, what is the implied interest rate?
a. 80 percent. b. 125 percent. c. 20 percent. d. 25 percent. e. 22 percent.