Budget Deficit means government spending on goods and services in excess of net tax revenues ? Question 1 options: True False Question 2 (2 points) Saved The government budget is affected by: Question 2 options: A change in the level of GDP A change in tax rates A change in the amount of government spending All of the above Question 3 (2 points) Saved True or False When there is an inflationary gap, governments should spend and tax in a way that reduces aggregate demand Question 3 options: True False Question 4 (2 points) Saved True or False? When there is a recessionary gap, governments should spend and tax in a way that increases aggregate demand Question 4 options: True False Question 5 (2 points) Saved What Is Not Money? Choose the best option Question 5 options: Currency in the vaults or tills of banks Gold Financial securities (stocks, bonds) Credit Cards All of the above Question 6 (2 points) Saved Target Reserve Ratio is the fraction of deposits that a bank wants to hold in cash Question 6 options: True False Question 7 (2 points) Saved Banks use excess reserves to make loans and Loans are eventually deposited, creating new money Question 7 options: True False Question 8 (2 points) Financial Institutions act as intermediaries between: -households, businesses, and governments that have funds available for lending, and -others who want to borrow those funds Question 8 options: True False Question 9 (2 points) Saved The demand for money is determined by: Question 9 options: The level of transactions (real GDP) The average value of transactions (the price level) The rate of interest All of the above Question 10 (2 points) Saved The return ("yield") on a bond depends on: the coupon rate the profit or loss on its sale Question 10 options: True False Question 11 (2 points) Increase in interest rate caused by: -Rise in the demand for money -Fall in the supply of money Question 11 options: True False Question 12 (2 points) Decrease in interest rate caused by: -Fall in the demand for money -Rise in the supply of money Question 12 options: True False Question 13 (2 points) A drop in the bank rate signals expansionary policy, means that credit is more freely available and cheaper Question 13 options: True False Question 14 (2 points) An increase in the bank reserve ratio and GDP signal a contractionary policy, which means credit is harder to obtain Question 14 options: True False Question 15 (2 points) Bank of Canada is overly concerned about controlling inflation, resulting in Contractionary monetary policy implies Question 15 options: big budget deficits due to high interest costs lower economic growth higher unemployment All of the above