A decrease in government purchases can close an expansionary gap by shifting the aggregate demand curve
a. True
b. False
Indicate whether the statement is true or false
True
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Assuming initially that the required reserve ratio = 10%, the currency-deposit ratio = 75%, and the excess reserve ratio = 156%, an increase in the excess reserve ratio to 200% causes the M1 money multiplier to ________, everything else held constant
. A) increase from 0.15 to 0.33 B) decrease from 0.73 to 0.61 C) increase from 0.54 to 0.67 D) decrease from 1.67 to 1.54
Which of the following is not a possible source of instability in velocity in the Monetarist model?
a. financial innovation. b. changes in monetary policy c. changes in interest rates d. credit cards.
If the government's expenditures exceeded its receipts, it would likely
a. lend money to a bank or other financial intermediary. b. borrow money from a bank or other financial intermediary. c. buy bonds directly from the public. d. sell bonds directly to the public.
The more substitutes that are available for a product, the more elastic the demand for that product is.
a. true b. false