What is the purpose of the Federal Deposit Insurance Corporation (FDIC)?
(A) To make sure that banks charge a fair amount of interest on loans.
(B) To make sure that banks do not fail.
(C) To make sure that customers do not lose money if a bank fails.
(D) To make sure that the government has enough gold to cover its expenses.
Ans: (C) To make sure that customers do not lose money if a bank fails.
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If the Fed promises to conduct a(n) ________ for several years, inflation expectation will be ________
A) contractionary fiscal policy; high B) expansionary monetary policy; high C) contractionary monetary policy; high D) expansionary fiscal policy; low
Does government borrowing crowd out private sector spending?
Which of the following is not an example of a compensating differential? Job A pays more than Job B because Job A requires
a. more international travel to dangerous locations. b. two night shifts per month. c. careful handling of toxic chemicals. d. an advanced degree.
Exhibit 2-17 Production possibilities curve
In Exhibit 2-17, if countries A and B currently have the same production possibilities curve (PPC) as given in the figure, but this year country A locates at point A on its PPC and country B locates at point B on its PPC, then country A:
A. is more efficient than country B. B. will grow at a faster rate than country B. C. will grow at a slower rate than country B. D. is producing more capital goods than country B.