The stimulus package of 2009 had the effect of
A) causing higher rates of inflation to occur.
B) giving new foreign aid to help less developed countries.
C) significantly raising the debt to GDP ratio.
D) reducing the primary government deficit.
C
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Bobby faces two choices. The first is to receive $600 on the spot. The other choice is to receive $800 a year from now. The interest rate is 5% per year. What could a possible explanation for Bobby choosing to receive $600 on the spot?
A) Bobby finds that the present value of the $800 a year from now is less than $600. B) Bobby may have time-inconsistent preferences. C) Although Bobby chooses $600 on the spot, he is actually indifferent between the two options. D) None of the above is correct.
If there are no excess reserves in the banking system and the Fed lowers the required reserve ratio, it follows that banks will now have __________, which they can use to extend loans and create new __________
A) positive excess reserves; checkable deposits B) negative excess reserves; currency C) positive excess reserves; currency D) more vault cash; checkable deposits E) none of the above