The interest rate that the Fed charges banks for loans to them through the traditional channel is called:
A. The discount rate
B. Interest on reserves
C. The federal funds rate
D. The prime rate
A. The discount rate
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According to Professor Baotai Wang who examined the crowding out phenomenon in Canada between 1961-2000, as discussed in the Case in Point, expenditures for protection of persons and property
A) involve no crowding out. B) may involve some crowding out, but they also stimulated private investment by firms winning government contracts for defense purchases. C) stimulate aggregate demand and aggregate supply. D) may involve some crowding out, which is offset by the strong supply-side effects they generate.
What takes place in the indirect finance market?
A) Corporate and government bonds are sold to savers. B) Government purchases of buildings and equipment are sold to the highest bidder. C) Part ownership of corporations is sold in the form of stocks. D) Deposits of savers are accepted and lent to borrowers.