Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; higher
C. higher; potential
D. lower; higher
Answer: A
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A bank has checking deposits of $400, saving deposits of $900, time deposits of $900, loans of $950, government securities of $900, outstanding credit card balances of $400, currency in its vault of $40, and deposits in its reserve account at the Fed
of $40. a. What is the amount of this bank's deposits that are in M1? b. What is the amount of this bank's deposits that are in M2? c. What is the amount of this bank's reserves?
If the export supply curve and the import demand curve of tomatoes of Luxembourg intersect at the international price level of tomatoes, then Luxembourg will suspend trading tomatoes in the international market
a. True b. False Indicate whether the statement is true or false
In making policies about the nation's money supply, the Federal Reserve Board
a. operates as an independent entity. b. must consult each member bank. c. must consult with Congress. d. must coordinate all activity with the White House.
According to liquidity preference theory, if there were a surplus of money, then
a. the interest rate would be above equilibrium and the quantity of money demanded would be too large for equilibrium. b. the interest rate would be above equilibrium and the quantity of money demanded would be too small for equilibrium. c. the interest rate would be below equilibrium and the quantity of money demanded would be too small for equilibrium. d. the interest rate would be below equilibrium and the quantity of money demanded would be too large for equilibrium.