The Federal Reserve raises the discount rate. This would be an example of:
a) easy fiscal policy
b) tight monetary policy
c) offensive monetary policy
d) tight fiscal policy
e) easy monetary policy
Answer: b) tight monetary policy
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People expect an inflation rate of 5 percent and the real interest rate is positive. Consequently the nominal interest rate will be
A) more than 5 percent. B) 5 percent. C) less than 5 percent. D) Without more information it is impossible to tell if the nominal interest rate will be more than, less than, or equal to 5 percent.
Banks still have a strong comparative advantage in extending __________ to __________ businesses
A) traded securities; small B) non-traded loans; small C) traded securities; large D) non-traded loans; large
Chelsea wants to start her own Christmas ornament business. She can purchase a suitable factory that costs $100,000 . Chelsea currently has $150,000 in the bank earning 3 percent interest per year. Suppose Chelsea purchases the factory using her own money. What is Chelsea's annual implicit opportunity cost of purchasing the factory?
a. $2,000 b. $3,000 c. $4,500 d. $5,000
The number of U.S. workers in unions today is:
A. about 21 %of all wage and salary workers. B. just under 15 million Americans. C. higher than it was in the 1950s. D. All of these are true.