Only when budget deficits are financed by money creation does the increased government spending lead to ________ in the ________
A) a decrease; monetary base
B) an increase; monetary base
C) a decrease; money multiplier
D) an increase; money multiplier
B
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How would budget deficit reduction through reduced government spending affect economic growth?
a. It would not affect economic growth because the budget deficit and economic growth are unrelated. b. It would stimulate economic growth. c. It would hinder economic growth. d. It would not affect economic growth because the positive and negative effects of deficit reduction would cancel each other out. e. It depends on which government programs are cut to achieve deficit reduction.
Which of the following statements is true?
a. According to the quantity theory of money, any change in the money supply will have no effect on the price level. b. There is an inverse relationship between the quantity of money demanded and the interest rate. c. All of the answers are correct. d. The speculative demand for money at possible interest rates gives the demand for money curve its upward slope.
Which of the following is most likely to be overconsumed?
A. Free water B. Tap water C. Sparkling water D. Bottled water
Which of the following best explains why the monopolist's marginal revenue is less than the selling price?
A. To sell more units, the monopolist must reduce price on all units sold. B. As the monopolist expands output, the average total cost will decline. C. The monopolist charges each consumer the highest possible price. D. When a firm has a monopoly, consumers have no choice other than to pay the price set by the monopolist.