Identify the correct statement about changes in money supply.
What will be an ideal response?
A decrease in money supply causes investment spending to decrease.
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An advantage of the personal consumption expenditures price index (PCE) over the Consumer Price Index (CPI) as a measure of inflation is that the PCE
A) includes the prices of more consumer goods and services. B) includes the prices of consumer goods, but not consumer services. C) includes the prices of consumer services, but not consumer goods. D) is a fixed market-basket price index that does not allow the mix of products to change each year.
Answer the following statements true (T) or false (F)
1. The value of money in the United States is based on the stock of gold and silver held by the United States government. 2. The Federal Reserve System is independent of Congress and the President, and does not have to follow orders from either Congress or the President. 3. The Federal Open Market Committee (FOMC) regulates markets and enforces antitrust laws to keep markets open and competitive. 4. The Federal Reserve System is the institution that issues the U.S. paper currency or dollar bills. 5. The general public can open deposit accounts at their district's Federal Reserve Bank.
Assuming the market is in equilibrium in the graph shown with demand D and supply S2 at a quantity of 8, consumer surplus is:
A. $7. B. $32. C. $11. D. equal to the producer surplus.
Last year a country's real GDP grew by 2%, it's inflation rate was 3%, and it's government budget deficit was about $200 billion. It's debt-to-GDP ratio was unchanged. About what was it's debt at the start of last year?
a. 10.0 trillion b. 6.7 trillion c. 4 trillion d. None of the above are correct.