If the government spending multiplier were 3.5, a $2 billion decrease in government spending would lower GDP by
A. $7 billion after one year.
B. $2 billion after two years.
C. $70 billion after one year.
D. $1.5 billion after one year.
Answer: A
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Suppose University Bank has zero excess reserves. If the required reserve ratio decreases, the
A. Bank's assets will increase. B. Money multiplier will decrease. C. Bank will be able to make more loans. D. Bank will not have enough required reserves.
If a certain automotive part can be purchased in Mexico for 60 pesos or in the United States for $6.25 and if the nominal exchange rate is 8 pesos per U.S. dollar, then the automotive part:
A. is more expensive in the United States. B. is less expensive in Mexico. C. is less expensive in the United States. D. costs the same in Mexico and the United States.
Consumer surplus measures
A. The difference between the minimum price a consumer is willing to pay and the price actually paid. B. The difference between the maximum price a consumer is willing to pay and the price actually paid. C. The difference between the amounts of a good a consumer is willing to pay, and how much of the good is available for sale. D. The sum of all of the marginal utilities for that good
The Group of Seven is an informal international institution that is comprised primarily of the:
A. major developing countries. B. leading industrial democracies. C. leading petroleum exporting countries. D. leading socialist countries.