Refer to the graph. If the initial equilibrium interest rate was 5 percent and the money supply increased by $100 billion, then the new interest rate would be:
A. 1 percent
B. 2 percent
C. 3 percent
D. 4 percent
C. 3 percent
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At the beginning of a recession, the expenditure multiplier
A) offsets the initial cut in autonomous expenditure and slows the recession. B) has no effect on the recession. C) offsets the initial cut in autonomous expenditure and reverses the recession. D) reinforces the initial cut in autonomous expenditure and reverses the recession. E) reinforces the initial cut in autonomous expenditure and adds force to the recession.
In which of the following categories has spending as a percentage of GDP generally declined since the 1960s?
a. National defense b. Health and Medicare c. Social Security d. Community and regional development
Current account transactions are all payments that are related to the purchase or sale of
A) goods only. B) services only. C) goods and services only. D) goods and services excluding government purchases.
Refer to the diagram. If actual production and consumption occur at Q2,
A. an efficiency loss (or deadweight loss) of e + f occurs. B. efficiency is achieved. C. an efficiency loss (or deadweight loss) of a + b + c + d occurs. D. an efficiency loss (or deadweight loss) of a + c occurs.