When the monetary base increases by $4 billion, the quantity of money increases by $10 billion. Thus, the money multiplier equals
A) 0.4.
B) 2.5.
C) 40.0.
D) none of the above.
B
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The flexible accelerator theory
A) recognizes that the desired capital-output ratio is not a constant. B) assumes that firms can make this period's actual capital stock equal to the desired capital stock. C) sets this period's expected output equal to last period's actual output. D) recognizes that a constant fraction of the capital stock is replaced each period.
Suppose favorable weather conditions temporarily raise the marginal productivity of existing capital. Weather conditions are expected to return to normal next year, so there is no change in the expected marginal productivity of future capital. In this situation, the interest rate will
a. rise. b. fall. c. remain unchanged. d. react unpredictably.
With eight hours of work Elmer can produce 20 pounds of carrots or 15 pounds of peas. With eight hours Bugs can produce 10 pounds of carrots or 7.5 pounds of peas. Can Elmer and Bugs gain from trade? Defend your answer
Compared to the poverty rate for blacks, the poverty rate for whites is a fraction of less than ______.
Fill in the blank(s) with the appropriate word(s).