The purchase by the central bank of newly created government debt is called "monetizing the deficit."
Indicate whether the statement is true or false
TRUE
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Foreign portfolio investment is sometimes called hot money because:
A. it can be withdrawn from a country very quickly. B. it is very difficult to trace. C. it is often invested in the assets which yield the highest returns in the world. D. earnings often go untaxed by the home government.
__________ will change for a number of reasons, including movements in income, taxes, expectations about future income, and changes in wealth levels.
a. Supply b. Price levels c. Consumption d. Demand
To an economist, the four factors of production are
A. Entrepreneurship, machinery, workers, and profit. B. Labor, workers, profit, and services. C. Land, labor, capital, and entrepreneurship. D. None of the choices are correct.
Assuming a reserve requirement of 20 percent, if the Fed sells $20 billion in bonds in the open market, the lending capacity of the system will eventually
A. Increase by $100 billion. B. Decrease by $100 billion. C. Decrease by $1 billion. D. Increase by $1 billion.