If commercial banks are maintaining a 4 percent reserve/deposit ratio and the Fed raises the required reserve ratio to 6 percent, then banks will ________ their loans based on current deposits, and the money supply will ________.
A. increase; increase
B. decrease; decrease
C. decrease; increase
D. increase; decrease
Answer: B
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The consumption function shows the relationship between planned real consumption spending and
A) planned real saving. B) the average propensity to consume. C) real disposable income. D) the marginal propensity to consume.
Explain whether Delta Airlines' sales are likely to fluctuate more or less than the sales of each of the following firms as the economy moves from recession to expansion and back to recession
Whirlpool Corporation (appliance manufacturer) Taco Bell The Boeing Company (aircraft manufacturer) GameStop (video game sales and rentals)
A crucial national income accounting identity sets the government budget deficit equal to
A) S - I - NX. B) S + I - NX. C) S - I + NX. D) S + I + NX.
The Federal Reserve System was founded in:
a. 1935. b. 1929. c. 1933. d. 1913.