Question 1
If interest rates are positive, one dollar today is worth
◦ more than a dollar a year from now.
◦ less than a dollar a year from now.
◦ the same as a dollar a year from now.
◦ nothing.
Question 2
A boom in the stock market affects the economy because
◦ wealth of households grow as the stock market booms.
◦ brokers make a lot of money.
◦ the Fed feels it can increase the money supply without worry.
◦ the stock market boom takes pressure off social security.