If the Fed has a goal of stable real GDP and government spending increased, which of the following would occur?
a. The money demand would not change, real GDP would not change, the interest rate would decrease, and there would be partial crowding out.
b. Money demand would not change, real GDP would not change, the interest rate would increase, and there would be complete crowding out.
c. Money demand would increase, real GDP would not change, the interest rate would increase, and there would be partial crowding out.
d. Money demand would not change, real GDP would increase, the interest rate would decrease, and there would be complete crowding out.
e. Money demand would increase, real GDP would not change, the interest rate would decrease, and there would be complete crowding out.
B
You might also like to view...
Which of the following accurately indicates how the recent outbreaks of terrorism have influenced the GDP of western nations?
a. Additional expenditures on security designed to protect individuals from terrorist attacks are subtracted from GDP. b. Additional expenditures on security designed to protect individuals from terrorist attacks are added to GDP as part of output. c. Since expenditures on the prevention of terrorism do not contribute to the well-being of individuals, they exert no impact on GDP. d. Since terrorism is merely a redistribution of output, expenditures on the prevention of terrorism do not contribute to GDP.
An increase in our production possibilities is known as:
A. Inflation. B. Crowding out. C. GDP per capita. D. Economic growth.
Exhibit 5-5 Demand curve for computers
?
In Exhibit 5-5, the total revenue at point E on the demand curve equals:
A. OD. B. FE. C. DE. D. ODEF.
Suppose under a gold standard the price of gold in the United States is $450 per ounce and the price of gold in the United Kingdom is 200£ per ounce. The exchange rate is thus
A. $0.45 per pound. B. $2.25 per pound. C. 2.25£ per dollar. D. 0.54£ per dollar.