If businesses spend an additional $150 billion for investment projects in 2010, what will be the impact on national income (Y) if the multiplier is 2?
A. Y will increase by $50 billion.
B. Y will increase by $150 billion.
C. Y will increase by $300 billion.
D. Y will increase by $450 billion.
Answer: C
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A) The sellers of gems reap high profits. B) Higher gains from trade are realized. C) The entire market shuts down. D) The sellers of lemons earn high profits.
In a two product two country world, international trade can lead to increases in
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Which of the following cannot be controlled precisely by the Federal Reserve?
A) Government securities held by the New York Federal Reserve B) The discount rate C) Reserve requirement ratios D) Total bank reserves
If an investment of $400 increases to $800 in 16 years, the annual interest rate of the investment must be _____
a. 18% b. 10% c. 9% d. 4.5% e. 1.8%