The rate of interest that the Fed charges banks on loans is called the reserve rate
a. True
b. False
Indicate whether the statement is true or false
False
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What is the difference between induced and autonomous expenditure? Which components of aggregate expenditure fall under which category?
What will be an ideal response?
If a person withdraws $500 from his/her checking account and holds it as currency, then M1 will ________ and M2 will ________
A) not change; increase B) not change; not change C) decrease; increase D) increase; decrease E) decrease: decrease
If aggregated demand is less than actual output, unplanned inventory ________ will cause output to ________
A) accumulation; rise B) depletion; fall C) depletion; rise D) accumulation; fall
If the bank advertises 6 percent annual interest rate on a one-year certificate of deposit and you anticipate the rate of inflation to rise to 3 percent during the year, then the real rate of interest on the certificate of deposit is
A) 9 percent. B) 6 percent. C) 3 percent. D) 2 percent.