Money that a firm uses to buy the physical plant, equipment, and raw materials for production is called

The country of Zlatan is in serious financial crisis after the banks of the country suffered huge losses. Most of the loans were granted to customers without any proper verification, resulting in a high rate of default. The government decided to create an Office of Thrift Supervision to insure deposited funds and to ensure that banks do not indulge in risky lending. Which of the following is a

likely consequence of this step? a. Banks will stop purchasing government bonds. b. Banks will stop keeping a certain amount of their reserves as deposits with the central bank. c. Banks will want to ensure that the difference between their assets and liabilities is positive. d. Banks will stop purchasing government bonds.

If the government's spending exactly equals its revenues during a budget year, that government is

A. balancing its budget. B. experiencing a budget surplus. C. running a budget deficit. D. paying off its public debt.