Because of transactions which take place in the underground economy, the
a. GDP calculation tends to overstate the actual value of goods sold in the economy.
b. GDP calculation tends to accurately portray the value of goods sold in the economy.
c. GDP calculation tends to understate the actual value of goods sold in the economy.
d. value of the GDP calculation will be equal to the value of the national income calculation.
e. value of the GDP calculation through the expenditure approach will be greater then the value calculated through the income approach.
C
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When the Federal Reserve increases the money supply, at the previous equilibrium interest rate households and firms will now have
A) the amount of money that they want to hold. B) more money than they want to hold. C) less money than they want to hold. D) to sell Treasury bills.
When banks need to borrow funds at the end of the day to meet their legal reserve requirement, they
a. borrow the required funds from the Fed on the federal funds market b. borrow the required funds from other banks on the federal funds market c. ask for extensions on the deadline to meet their requirements, but pay a federal fundsrate as a penalty d. engage in open market operations on the federal funds market e. borrow from the government which reduces the government's public debt