The income elasticity of demand is defined as the percentage change in quantity demanded divided by the percentage change in income
a. True
b. False
Indicate whether the statement is true or false
True
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The MPC is 0.90 and there are no income taxes or imports. If government expenditures on goods and services increases by $2.0 billion, after the multiplier effect works out, aggregate expenditure increases by
A) $2.22 billion. B) $2.0 billion. C) $10 billion. D) $20 billion. E) $1.8 billion.
Which of the following compose the reserves of a commercial bank?
a. checkable deposits and time deposits b. vault cash and deposits of the bank with the Federal Reserve c. U.S. securities and stock equity d. cash and U.S. securities
A bank provides:
A. risk diversification; that is, connecting buyers and sellers to ease saving and borrowing. B. liquidity; that is, access to cash when and where you want it. C. liquidity; that is, it connects buyers to sellers to ease saving and borrowing. D. risk diversification; that is, access to cash when and where you want it.
When the government runs a budget deficit, we would expect to see that
A) private saving will fall. B) investment will fall. C) G + TR < T. D) public saving is positive.