The government wants to increase its spending by $1 billion to stimulate the economy and is counting on the government spending multiplier to help. Taking into account direct expenditure offset effects, what is its best spending option?
A) a new cruise missile for the military
B) expanding the school lunch program
C) constructing more low income housing
D) providing textbooks for college students
A
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Refer to Figure 4-3. What is the total amount that Kendra is willing to pay for 2 ice cream cones?
A) $1.50 B) $3.00 C) $5.50 D) $6.50
Which of the following best defines dollarization?
A. A country uses the U.S. dollar as well as its currency for all transactions. B. A country adopts a foreign currency for all transactions basically eliminating its own monetary policy. C. The central bank of a country agrees to exchange its own currency for U.S. dollars at a fixed exchange rate. D. A country eliminates its own currency for international transactions and requires that all international transactions be conducted in U.S. dollars.
Compounding refers to the
A. process of earning interest on both the principal and the interest of an investment. B. internal rate of return a firm earns on an investment. C. real interest return after taxes. D. calculation of after tax interest returns.
Bank of Roseland has $700 million in deposits. The required reserve ratio is 15%. Bank of Roseland must keep ________ in reserves.
A. $55 million B. $85 million C. $105 million D. $140 million