Social Security payments automatically increase when the Consumer Price Index (CPI) goes up because of the:
A. age of the recipient.
B. years receiving social security.
C. cost-of-living adjustments.
D. individual being married or unmarried.
Answer: C
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Which of the following statements is true?
A) The more liquid the bond, the lower the yield. B) Tax-free bonds normally have a higher interest rate than other types of bonds. C) The price of a bond increases as it becomes more risky. D) The yield curve illustrates the relative default risks of alternative types of bonds.
Why does the Fed have imperfect control over the money supply?
a. Because the Fed does not know how much reserves will change when it buys or sells securities. b. Because of unpredictable changes in the public's desire to hold cash and banks' desires to hold reserves. c. Because of unpredictable changes in reserve requirements. d. Because of the secrecy of FOMC meetings, which lead to policy surprises.
What would happen in the market for loanable funds if the government were to increase the tax on interest income?
a. The supply of loanable funds would shift right. b. The demand for loanable funds would shift right. c. The supply of loanable funds would shift left. d. The demand for loanable funds would shift left.
A reduction in private saving (S) can be reflected in
A) an increase in the budget deficit. B) an increase in investment. C) a reduction in net exports. D) all of the above