62) Suppose the interest rate is r = 20% and the government institutes a mandatory public pension plan where the household must pay a premium of 300 in the present, but will receive a benefit of 360 to consume in the future. Relative to the (CP, CF) bundle (700, 360), the household will: A) do nothing, it will consume the bundle B) engage in private saving to increase both Cp and CF C) engage in private saving to decrease Cp and increase CF D) engage in private borrowing to increase Cp and decrease CF E) engage in private borrowing to increase both Cp and CF
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Macroeconomics
| A | B | Answer | ||
| Which one of the following will be an automatic stabilizer | A. Board of Governors and the 12 Federal Reserve Banks | |||
| GDP is the market value of | B. Structural | |||
| A decrease in government spending will cause | C. Real GDP is adjusted for changes in the price level. | |||
| An increase in aggregate demand is most likely to be caused by a decrease in | D. Price of one nation's currency in terms of another nation's currency | |||
| Which is one of the three types of unemployment | E. Two countries are comparatively able in producing what they need, however choices to engage in international trade | |||
| The Federal Reserve System consist of how many members and how many locations | F. People receive loans from their banks. | |||
| Foreign exchange rates refer to the | G. Real GDP. | |||
| Money is "created" when | H. Discount Rate | |||
| Fiscal policy is enacted through changes in | I. Private investment is crowded out by public spending | |||
| The tools of monetary policy for altering the reserves of commercial banks are the | J. All final goods and services produced in an economy in a given year. | |||
| The Federal funds rate is the rate that banks pay for loans from? |
| |||
| What is meant by the crowding out effect | L. Decrease in aggregate demand. | |||
| The goal of expansionary fiscal policy is to increase | M. Unemployment insurance | |||
| Nominal GDP differs from real GDP because | N. Discount rate, reserve ratio, open market operations, and term auction | |||
| What is meant by comparative advantage | O. Taxation and government spending. |
