If the government announces a new increase in spending with no change in taxes, which of the following would most likely occur?
a. No change in the aggregate demand curve as well as no movement along it
b. A leftward shift of the aggregate demand curve
c. An upward movement along the aggregate demand curve
d. A rightward shift of the aggregate demand curve
e. A downward movement along the aggregate demand curve
D
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In response to the destructive bank panics of the Great Depression, future bank panics are designed to be prevented by
A) establishing a fractional reserve system of banking. B) increasing the required reserve ratio to 100%. C) the establishment of the Federal Deposit Insurance Corporation. D) the Federal Reserve System conducting open market operations. E) the Federal Reserve System acting as a lender of last resort.
From a bank's point of view, its deposits are liabilities
a. True b. False Indicate whether the statement is true or false
Which of the following will lower the present value of a bond?
a. a fall in the interest rate b. an increase in the principal c. a shorter time to maturity d. an increased risk of default e. none of the above
Given fixed exchange rates, what happens to the money supply if the government reduces spending?
a. The change in the money supply depends on the degree of international capital mobility. b. The money supply does not change. c. The money supply falls. d. The money supply rises.