Questions from Macroeconomics


Q: What is the difference between discretionary fiscal policy and automatic fiscal policy

What is the difference between discretionary fiscal policy and automatic fiscal policy?

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Q: “How much money did you make last year?” What is

“How much money did you make last year?” What is wrong with that statement?

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Q: Can M1 fall as M2 rises? Can M1 rise without M2

Can M1 fall as M2 rises? Can M1 rise without M2 rising too? Explain your answers.

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Q: Why isn’t credit card money?

Why isn’t credit card money?

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Q: Define the following: (a) Time deposit (

Define the following: (a) Time deposit (b) Money market mutual fund (c) Money market deposit account (d) Fractional reserve banking (e) Reserves

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Q: Explain the process by which goldsmiths could increase the money supply.

Explain the process by which goldsmiths could increase the money supply.

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Q: What is a financial system, and why would a country with

What is a financial system, and why would a country with a well-developed and fully functional financial system be better off than a country without it?

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Q: What is the difference between demand and quantity demanded?

What is the difference between demand and quantity demanded?

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Q: Identify each of the following as either an adverse selection or a

Identify each of the following as either an adverse selection or a moral hazard problem: (a) Poor drivers apply for car insurance more than good drivers do (b) The federal government promises to help...

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Q: Explain how financial intermediaries help to solve adverse selection problems and moral

Explain how financial intermediaries help to solve adverse selection problems and moral hazard problems when it comes to lending and borrowing.

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