Other things equal, the steeper the slope of the aggregate supply curve, the more effective will be the expansionary fiscal policy
a. True
b. False
Indicate whether the statement is true or false
False
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Saving equals:
A. assets minus liabilities. B. wealth minus assets. C. current income minus spending on current needs. D. current spending minus current income.
The aggregate supply curve illustrates that the
A) higher the price level, the greater the quantity of real GDP supplied. B) higher the price level, the smaller the quantity of real GDP supplied. C) aggregate demand curve is not needed to determine the aggregate price level. D) price level does not affect the quantity of real GDP supplied. E) amount of potential GDP increases when the price level rises.
Nick considers macaroni and cheese to be an inferior good. As a result of macaroni and cheese being an inferior good, the
A) substitution effect must be larger in magnitude than the income effect so that less is purchased as the price falls. B) substitution effect must be smaller in magnitude than the income effect so that less is purchased as the price falls. C) income effect is positive, so that more is purchased as income increases. D) income effect is negative, so that less is purchased as income increases.
Bank A has checkable deposits of $100 million, vault cash equaling $1 million and deposits at the Fed equaling $14 million. If the required reserve rate is ten percent what is the maximum amount Bank A could lend?
A. $14 million B. $85 million C. $15 million D. $5 million