Question

True / False

1- The discount rate of interest is the interest rate one bank pays another bank to borrow reserves.

2- Higgs argues that public works spending is akin to taking water out of the deep end of a swimming pool and pouring it into the shallow end.

3- To illustrate the problem with investment in a bust Mises cites the example of a cattle rancher that doesn’t have enough cowboys to keep the cattle together.

4- According to the Austrian theory, broad disturbances in our economy point to a monetary cause.

Answer 1

Answer :

1. The discount rate of interest is the interest rate one bank pays another bank to borrow reserves. - True

2.  Higgs argues that public works spending is akin to taking water out of the deep end of a swimming pool and pouring it into the shallow end. - True

3. To illustrate the problem with investment in a bust Mises cites the example of a cattle rancher that doesn’t have enough cowboys to keep the cattle together. - False

4. According to the Austrian theory, broad disturbances in our economy point to a monetary cause.- True