In spite of having no natural resources, a country like _____ was able to make itself one of the wealthiest countries in the world because it allowed private ownership.
a. India
b. Poland
c. Hungary
d. Hong Kong
e. China
QUESTION 2_____ is the primary reason that explains why some nations are richer than the others.
a. A democratic government
b. A strong judicial system
c. Access to education
d. Private ownership
e. A stable currency
QUESTION 3According to the text, as compared to rich countries, most of the poor countries do not fare well because:
a. they have no oil.
b. the people in these countries have limited property rights.
c. access to education in these countries is very limited.
d. high tariffs in these countries prevent international trade.
e. they do not have any natural resources.
QUESTION 4How can the Fed increase the money supply? How can the Fed decrease the money supply? Be specific.
QUESTION 5Describe the three basic tools used by the Fed to change the money supply. Which of these tools is most relied on in practice? Least relied on? Why?
QUESTION 6Discuss how a single bank creates money. What is the limit to which a single bank can add to the money supply? By how much can an entire banking system add to the money supply?
QUESTION 7The total lag for fiscal policy tends to be shorter than the total lag for monetary policy.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 8Raising the required reserve ratio causes the money multiplier to increase.
a. True
b. False
Indicate whether the statement is true or false
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