The slope of the consumption function is the
A) APS. B) MPC. C) MPS. D) APC.
B
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Answer the following statement(s) true (T) or false (F)
1.Money market equilibrium occurs at that real interest rate where the quantity of money demanded equals the quantity of money supplied. 2.In the long run, if the money supply rises by 20 percent, the price level rises by 20 percent. 3.During an economic recession, the Fed will engage in a contractionary monetary policy. 4.By implementing a contractionary monetary policy, the Fed decreases the money supply and increases interest rates. 5.If the economy is at full employment, an increase in money supply will create a new equilibrium that cannot be sustained.
Under a fixed exchange rate system, at low domestic real interest rates the demand for domestic currency ________, so the central bank ________ foreign-exchange reserves
A) increases; acquires B) increases; loses C) decreases; acquires D) decreases; loses
In the graph above, what do the dotted lines represent?
A) transaction and opportunity costs B) the boundaries of profitability for arbitrage C) the risk premium associated with the countries D) the variability in spot rate expectations
If a good is normal and its price increases,
a. the income effect will be positive and the substitution effect will be positive. b. the income effect will be negative and the substitution effect will be negative. c. the income effect will be positive and the substitution effect will be negative. d. the income effect will be negative and the substitution effect will be positive.