The assumption that the velocity of money and the quantity being produced is constant is held by the:
A. Keynesian school.
B. supply-side school.
C. classical school.
D. rational expectations school.
Answer: C
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Under the European System of Central Banks, the Governing Council is similar in structure to the ________ of the Federal Reserve System
A) Board of Governors B) Federal Open Market Committee C) Federal Reserve Banks D) Federal Advisory Council
An increase in the marginal propensity to hold money
a. results in an fall in the interest rate and a decline in income. b. raises the interest rate and lowers income. c. results in a fall in the interest rate and a rise in income. d. raises both the interest rate and income.
Borrowers in wealthy countries that have few domestic investment opportunities would gain if
A. capital flows between nations are prohibited. B. all restrictions on capital flows between nations were removed. C. factor-price equalization takes place. D. governments set allowable interest rates.
A commercial bank lists net worth as
A. retained earnings. B. a liability. C. excess reserves. D. an asset.