A decrease in the nominal interest rate would
a. encourage people to hold larger money balances.
b. encourage people to hold smaller money balances.
c. force the Fed to increase the money supply.
d. cause households to decrease consumption.
A
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The value of exports minus the value of imports in a period is called the:
A. trade balance. B. trade gap. C. international equilibrium. D. budget balance.
Financial intermediaries pool the resources of many small savers so that they can:
A. lower their transaction costs of obtaining funds. B. obtain the funds necessary to make loans to borrowers seeking large amounts. C. avoid paying any interest to obtain funds to lend. D. charge fees to these small savers and earn substantial income.
According to the monetarists, what is the main cause of macroeconomic instability?
What will be an ideal response?
If the Fed fears inflation, it ________ by ________ government securities
A) decreases aggregate supply; selling B) decreases aggregate demand; selling C) increases aggregate supply; buying D) decreases aggregate supply; buying E) increases aggregate demand; selling