The Fed's margin requirements control
A. the federal funds rate.
B. the amount of reserves banks must keep in cash or in their accounts with the Federal Reserve.
C. the interest rate banks are allowed to pay on demand deposit accounts.
D. how much money people can borrow when they buy stock.
Answer: D
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In most cases, expenditure-switching policies must be accompanied by expenditure-reducing policies because
A) expenditure-switching policies are completely ineffective without expenditure-reducing policies. B) inflation ensues as home country domestic expenditures switch away from foreign goods to domestic goods unless overall expenditures are reduced. C) inflation abroad may increase the demand for domestic goods, causing inflation to rise. D) the depreciation in the exchange rate may decrease the domestic price of foreign goods, causing an increase in the current account deficit. E) None of the above.
Why might most people, as in the United States, save less than is good for themselves and for the economy as a whole? How might policymakers encourage more saving?
What will be an ideal response?