QUESTION The Cyclically Adjusted Budget Balance is an estimate of what the Fiscal Balance would be if _______________. a. Equilibrium GDP is greater than Potential GDP. b. The Equilibrium GDP is equal to Potential GDP. c. Equilibrium GDP is greater than Potential GDP. d. What the budget balance would be at the trough of the Business Cycle. QUESTION When the FED conducts monetary policy, it relies primarily on a. Direct targeting of the monetary aggregates such as M1 and M2 along with changes in consumer lending rates. b. Only consumer lending rates. c. Open market operations and changes in the fed funds rate. d. Only changes in the Fed funds rate. QUESTION Given the following data: Demand Deposits are equal to 1000, Time Deposits are equal to 500, Large Savings Accounts are equal to 300, and the public holds 50 in cash. If the Reserve Requirement on Demand Deposits is 10%, what is the Monetary Base? a. 100 b. 150. c. 1800. d. 1900. QUESTION Banks hold liabilities with short term maturities and hold assets with longer term maturities. This is known as: a. Deposit maturation. b. Maturity transformation or asset time liability mismatch. c. Shadow banking. d. Subprime lending. Ans all

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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QUESTION

The Cyclically Adjusted Budget Balance is an estimate of what the Fiscal Balance would be if _______________.

	a.	Equilibrium GDP is greater than Potential GDP.
	b.	The Equilibrium GDP is equal to Potential GDP.
	c.	Equilibrium GDP is greater than Potential GDP.
	d.	What the budget balance would be at the trough of the Business Cycle.

QUESTION

When the FED conducts monetary policy, it relies primarily on

	a.	Direct targeting of the monetary aggregates such as M1 and M2 along with changes in consumer lending rates.
	b.	Only consumer lending rates.
	c.	Open market operations and changes in the fed funds rate.
	d.	Only changes in the Fed funds rate.

QUESTION

Given the following data: Demand Deposits are equal to 1000, Time Deposits are equal to 500, Large Savings Accounts are equal to 300, and the public holds 50 in cash. If the Reserve Requirement on Demand Deposits is 10%, what is the Monetary Base?

a.
100

b.
150.

c.
1800.

d.
1900.

QUESTION

Banks hold liabilities with short term maturities and hold assets with longer term maturities. This is known as:

a.
Deposit maturation.

b.
Maturity transformation or asset time liability mismatch.

c.
Shadow banking.

d.
Subprime lending.

Ans all

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