The simplified expenditure multiplier:
A. grows larger as the marginal propensity to consume increases.
B. is calculated as 1/(1 ? MP).
C. has a positive value.
D. All of these are true.
Answer: D
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If a $1 million open market purchase by the Fed generates a new deposit at a bank that immediately causes the bank's reserves held at the Fed to increase by $1 million,
then the T-account effects are that the bank's assets and liabilities ________ by $1 million and that the Fed's assets and liabilities ________ by $1 million. A) decline; decline B) increase; decline C) decline; increase D) increase; increase
For a nondiscriminating monopolist, describe the relationship between market price (P), average revenue (AR), and marginal revenue (MR)
a. P = AR = MR b. P > AR = MR c. P = AR > MR d. P > AR > MR e. P = AR < MR
Each of the following would decrease the demand for U.S. dollars, shifting the demand curve for dollars to the left, EXCEPT:
A. a decrease in real GDP abroad. B. a depreciation of foreign currencies relative to the U.S. dollar. C. a decreased preference for U.S.-made goods. D. a decrease in the real interest rate on U.S. assets.
Which group aids the Board of Governors of the Federal Reserve System in conducting monetary policy?
A. Federal Advisory Council B. Federal Open Market Committee C. U.S. Congress D. U.S. Treasury