If the Fed buys $1 million in government securities from Bank A, then the immediate effect of this transaction is an increase in:
A. Money supply M1
B. Bank A's excess reserves
C. Bank A's liabilities
D. Bank A's required reserves
B. Bank A's excess reserves
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Suppose a comprehensive plan applies to 2,000 low-risk people and 1,000 high-risk people opting for insurance coverage. If the average claim submitted by low-risk people is $200 while that submitted by high-risk people is $2,000 . what would be the net benefit accrued by a high-risk person paying the break even premium charged by the insurance company?
a. -$300 b. $1,800 c. $1,200 d. -$400
The size distribution of income
A. Tells how personal income is divided up among households or income classes. B. Reflects the distribution of financial assets. C. Focuses on the distribution of income to different factors of production. D. Is the same thing as the functional distribution of income.
One similarity between the beliefs of the classical economists and Keynes is that increased saving would necessarily stimulate an equal amount of increased investment spending
Indicate whether the statement is true or false
Suppose C = 1000 + .9Y, G = 400, I = 100, (X – IM) = 0, and there are no income taxes. If government purchases increase by 100, equilibrium GDP will
a) rise by 25% b) rise by a factor of 10 c) rise by 90 d) rise by 100 e) rise by 1,000