Make use of a T-account to show the effect of the Fed's purchase of $5 billion worth of foreign government securities on the Fed's balance sheet (note: assume the Fed writes a check to purchase the securities)
What will be an ideal response?
The Fed's assets increase as it accumulates $5 billion more in foreign assets (international reserves) and its liabilities increase as reserves. rise by $5 billion
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Social Security is based on the concept of
a. private insurance supported by public money b. private insurance supported by private money c. specific retirement packages for each industry d. accumulation of your own funds that will be returned to you, with interest, upon retirement e. pay-as-you go
A limitation on fiscal policy is time. Which of the following does not impact the timeliness of fiscal policy?
A. It takes time to recognize that the economy is in trouble. B. It will take time to develop a policy strategy and for Congress to pass it. C. All of these impact the timeliness of fiscal policy. D. It will take time for the policy to be implemented and for the many steps in the multiplier process to unfold.
If a teacher tells a student that those who attend the study session typically score higher on the final exam
A) the student has a positive incentive to attend the study session because she may get a higher grade. B) the student has a negative incentive to attend the study session because she will be punished if she does not go. C) the student has no greater incentive to attend because there is no guarantee she will get a higher grade on the exam. D) a "C" student will be making an irrational decision if she decides to skip the study session since she has plenty of time to go.
Which one of the following does not cause a shift in the demand curve for gasoline?
A. An increase in gas tax B. An increase in oil imports from the Gulf C. An increase in the amount of alternative fuels D. An increase in the price of gasoline