What is the monetary base and how does it relate to the Fed's balance sheet?
What will be an ideal response?
The monetary base is the sum of Federal Reserve notes, coins, and depository institutions' deposits at the Fed. Aside from coins, the rest of the monetary base consists of Federal Reserve liabilities. Federal Reserve notes and depository institutions' deposits are liabilities of the Federal Reserve.
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If the income tax rate is 20 percent and the tax rate on consumption expenditure is 15 percent, then the tax wedge is
A) 2 percent. B) 35 percent. C) 300 percent. D) 5 percent. E) None of the above answers is correct.
The quantity of ________ by households will be less ________
A) saving; the higher is disposable income B) saving; the lower is the real interest rate C) consumption; the lower is the inflation rate D) consumption; the higher is disposable income