When one commercial bank borrows from another commercial bank, it pays the _____

Question

When one commercial bank borrows from another commercial bank, it pays the __________ rate, when the bank borrows from The Fed it pays the ____________ rate.

Question 6 options:

discount; federal funds

T-bill; discount

federal funds; discount

prime; federal funds

nominal; real

Increased government purchases combined with tax cuts characterize

Question 7 options:

expansionary fiscal policy.

counter-effective policy.

monetary policy.

contractionary fiscal policy.

If the SRAS curve intersects the AD curve to the left of full employment real GDP (potential output), the economy is

Question 8 options:

at full-employment Real GDP.

in a recessionary or contractionary gap.

in an inflationary gap.

an employment gap..

discount; federal funds

T-bill; discount

federal funds; discount

prime; federal funds

nominal; real

Increased government purchases combined with tax cuts characterize

Question 7 options:

expansionary fiscal policy.

counter-effective policy.

monetary policy.

contractionary fiscal policy.

If the SRAS curve intersects the AD curve to the left of full employment real GDP (potential output), the economy is

Question 8 options:

at full-employment Real GDP.

in a recessionary or contractionary gap.

in an inflationary gap.

an employment gap..

Explanation / Answer

6. discount; federal funds

7. expansionary fiscal policy. Tax cut is expansionary fiscal policy while increased government purchase also increases money supply.

8. in a recessionary or contractionary gap because Current GDP is less than Potential GDP

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