Suppose the current level of output is 5000. A 10% increase in productivity would increase the current level of output to
A) 5050.
B) 5100.
C) 5500.
D) 6000.
C
You might also like to view...
Companies that enable investors to use their savings to buy financial securities are referred to as:
A) hedge fund companies. B) banks. C) private equity funds. D) asset management companies.
The magnitude of the tax multiplier is ________ the magnitude of the government expenditure multiplier
A) greater than B) equal to C) smaller than D) the inverse of E) exactly one half
When banks hold excess reserves, the size of the money multiplier
A) is less than the simple deposit multiplier would suggest. B) is greater than the simple deposit multiplier would suggest. C) is equal to the size of the simple deposit multiplier. D) becomes infinite.
Suppose that the federal funds rate and the discount rate are equal initially at 3%. If the discount rate is then lowered to 2.5%, to whom will a bank be more likely to go for a loan: the Federal Reserve or another bank? Explain your answer in detail, and be sure to mention the impact that this situation would have on the money supply