Assume a money multiplier of 4 and a government expenditure of $20 million. If the Treasury borrows $20 million from the banking system while the banks have excess reserves, the money supply will
A) rise by $5 million.
B) rise by $20 million.
C) rise by $80 million.
D) not be affected.
B
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A price floor would be established in cases where the government believed the market equilibrium price would:
a. result in a surplus. b. be too high. c. result in a shortage. d. be too low. e. yield excess profits.
The highest marginal tax rate for the federal income tax in the United States is
a. 10 percent b. 28.3 percent c. 35 percent d. 45.4 percent e. 50 percent
Which of the following has the least impact on households' saving decisions?
A) the real rate of interest B) the quantity of imports entering the country C) expected future income D) the level of disposable income
Fine tuning represents which of the following?
A) policy makers' attempts to minimize the deviations of actual output from the natural level of output B) policy makers' attempts to achieve zero inflation C) policy makers' attempts to minimize fluctuations in interest rates D) policy makers' attempts to maintain a given rate of growth in the nominal money supply E) policy makers' attempts to minimize variations in the real exchange rate