Suppose there was a banking crisis. The money supply would shrink by the greatest amount if the public ________ their currency—deposit ratio and the banks ________ their reserve—deposit ratio
A) decreased; decreased
B) decreased; increased
C) increased; decreased
D) increased; increased
D
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A business cycle expansion increases income, causing money demand to ________ and interest rates to ________, everything else held constant
A) increase; increase B) increase; decrease C) decrease; decrease D) decrease; increase
Suppose the central bank announces that it will permanently increase the inflation rate and there is central bank credibility
With adaptive expectations, expectations of inflation will adjust ________, and with rational expectations, expectations of inflation adjust ________. A) slowly; slowly B) slowly; immediately C) immediately; immediately D) immediately; slowly
Identify an example of a stock variable
a. The growth in investment in an economy b. The change in the price level in an economy over the years c. The number of unemployed people in an economy in a particular year d. The increase in the money supply in an economy e. The fall in consumer spending during two consecutive years
On average, countries that have a larger degree of economic freedom tend to have
a. higher per capita income levels, but slower rates of economic growth, than countries with less economic freedom. b. lower per capita income levels, but more rapid rates of economic growth, than countries with less economic freedom. c. both higher per capita income levels and more rapid growth rates than countries with less economic freedom. d. both lower income levels and slower growth rates than countries with less economic freedom.