According to the saving and investment equation, if net foreign investment rises by $60 million
A) national saving will fall by $60 million. B) private saving will fall by $60 million.
C) national saving will increase by $60 million. D) domestic investment will rise by $60 million.
C
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Fractional reserve banking is the system that
A) allows banks not to insure their deposits. B) allows banks not to join the Federal Reserve System. C) limits banks' activities from crossing state lines. D) allows banks to keep smaller reserves than their deposits.
The amount of money that someone would pay today for the right to receive a future payment is called
a. the present value of the future payment b. the determinate value of the future payment c. the interest rate d. the principal e. the time discount
The money multiplier can be as ________ as the reciprocal of the reserve ratio but is usually ________.
A. high; lower B. high; constant C. low; constant D. low; higher
How does the imposition of a tariff reduce the price of imports?
A. At the lower quantity supplied, the price to the importer is lower than if there were free trade. B. At the lower quantity demanded, the price to the importer is lower than if there were free trade. C. Supply of the product is increased from domestic production, reducing the price of the imports. D. Demand for the product is decreased, so that price must fall.