There are three prerequisites to creating money. They are
a. currency, homogeneity, volatility
b. fractional reserve system operating with financial intermediaries, people willing to make demand deposits, borrowers prepared to take out loans
c. Federal Reserve Notes, willing creators of demand deposits, investment managers
d. banks loaning new deposits to other banks, borrowers who create M1, a need for a store of value
e. excess reserves, reserve requirements, financial intermediaries
B
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If the economy has a structural deficit of $25 billion and a cyclical deficit of $75, we can conclude that the current budget deficit is ________ billion
A) $75 B) $25 C) $0 D) $50 E) $100
Suppose that IS and LM intersect at full-employment output. A leftward shift of IS will be followed by a __________ price level that shifts LM to the __________ in a return to full employment
A) rising; right B) rising; left C) falling; right D) falling; left