Alan puts $20,000 in an uninsured savings account at the Boston National Bank. Susie borrows $20,000 from the Boston National Bank, flies to a Central African country, and is never heard from again. Which of the following is true in this case?
a. Alan will lose her $20,000
b. Alan will lose her $20,000 if she and Norma are related.
c. Alan will lose her $20,000 if the First National Bank makes all of its loans to people who run off to South Pacific islands.
d. Alan will not lose her $20,000 no matter what happens to the First National Bank.
e. Alan will not lose her $20,000 unless the Fed fails
c
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Of the following, which is NOT a monetary policy rule the Fed could follow?
A) an unemployment rate targeting rule B) an inflation targeting rule C) a money targeting rule D) a k-percent rule E) a nominal GDP targeting rule
When the government's outlays equal its tax revenues, then the budget
A) is balanced. B) could be either in surplus or deficit. C) is legal only because expenditures equal tax revenues. D) is in surplus. E) is in deficit.
Comovement is
A) the tendency for declines in economic activity to be followed by further declines, and for growth in economic activity to be followed by more growth. B) the idea that the standard pattern of contraction—trough—expansion—peak occurs again and again in industrial economies. C) the tendency of many economic variables to move together in a predictable way over the business cycle. D) the idea that peaks and troughs of the business cycle occur at regular intervals.
Unlike the 1930s, the Federal Reserve System followed an easy money policy in the first decade of the 2000s and, consequently, was able to prevent a severe recession from following a period of notably high economic activity
Indicate whether the statement is true or false