A tax-cut will have a greater effect on equilibrium GDP if the:
A. Marginal propensity to consume is smaller
B. Marginal propensity to save is smaller
C. Marginal propensity to save is larger
D. Average propensity to consume is larger
B. Marginal propensity to save is smaller
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Which of the following is NOT a major concern of international economic theory?
A) protectionism B) the balance of payments C) exchange rate determination D) bilateral trade relations with China E) the international capital market
The real seignorage collected by the government in an all-currency economy is the product of
A) the rate of inflation and the real supply of government bonds. B) the rate of inflation and the real money supply. C) the debt—GDP ratio and the real money supply. D) the debt—GDP ratio and the rate of inflation.
If you were going to write a function for money demand, you would say that the demand for money holdings:
A. varies inversely with both the nominal interest rate and nominal income. B. varies inversely with nominal income and directly with the nominal interest rate. C. varies inversely with the nominal interest rate and directly with nominal income. D. varies directly with both the nominal interest rate and nominal income.