When tax code changes increase saving incentives, the interest
rate will decrease and investment will increase.
True
False
7. When the Fed decreases the discount rate, banks
will
a.
borrow more from the Fed and lend more to the public. The money
supply increases
b.
borrow more from the Fed and lend less to the public. The money
supply decreases
c.
borrow less from the Fed and lend more to the public. The money
supply increases
d.
borrow less from the Fed and lend less to the public. The money
supply decreases
If a full time work give up his full time job for a part
time job he is hired for, the unemployment rate will not be
affected by this change.
True
False
Structural unemployment are usually long term and frictional
unemployment are usually short term.
True
False
If you hear in the news that the Federal Reserve conducted
open-market sales, then you should expect money supply to
increase
True
False