If the Fed has a goal of stable real GDP and the government announces a tax cut, which of the following would occur?
a. 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
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In a proportional tax system, ________
A) the average tax rate faced by an individual exceeds the marginal tax rate B) the marginal tax rate faced by an individual exceeds the average tax rate C) the average tax rate equals the marginal tax rate D) the marginal tax rate faced by all households are equal
The quantity theory of money predicts that, in the long run, inflation results from the
A) money supply growing at a faster rate than real GDP. B) velocity of money growing at a faster rate than real GDP. C) velocity of money growing at a lower rate than real GDP. D) money supply growing at a lower rate than real GDP.
As of 2009, most countries in the world live in autarky
Indicate whether the statement is true or false
By April 2010
A) only about 10 percent of foreign exchange trades were against euros. B) only about 24 percent of foreign exchange trades were against euros. C) only about 39 percent of foreign exchange trades were against euros. D) only about 42 percent of foreign exchange trades were against euros. E) only about 60 percent of foreign exchange trades were against euros.