Consider a hypothetical economy, whose GDP was $10,000 . consumption equaled $9,800, investment equaled $125, goods exported equaled $255, and goods imported equaled $500, in 2010 . Calculate the government spending in this economy during the year

The most commonly used tool by the Federal Reserve to control the monetary base is

a. changes in the discount rate. b. changes in tax rates on commercial banks. c. changes in legal required reserve ratios. d. open market operations.

During the 2007-2009 financial crisis, the Federal Reserve took some unusual steps in its conduct of monetary policy. Which of the following was not one of them? a. It invested in AIG

b. It invested more than $1 trillion in mortgage-backed securities. c. It worked with the U.S. Treasury and with other regulators to stabilize banks and thaw frozen credit lines. d. It worked with the U.S. Treasury and other regulators to help conduct a stress test of the 19 largest banks. e. It bailed out General Motors.