An increase in the real risk-free interest rate causes the:
a. Preferred asset ratio for currency in circulation (C/D) to fall, which decreases the quantity of real loanable funds supplied.
b. Preferred asset ratio for customary reserves (U/D) to fall, which increases the quantity of real loanable funds supplied.
c. Preferred asset ratio for near money (N/D) to fall, which decreases the quantity of real loanable funds supplied.
e. None of the above.
.B
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The Keynesian macroeconomic model states that
A) changes in technology generate business cycles. B) the economy is inherently unstable and government intervention is required to maintain continued economic growth. C) fluctuations in the quantity of money are responsible for most economic recessions. D) markets work efficiently to produce the best macroeconomic outcomes. E) the economy is fairly stable.
Refer to the scenario above. Maria should choose to:
A) drive, as it will save her $120. B) travel by train, because it is quicker. C) drive, as it will give her a real saving of $150. D) travel by train, as it will save her $30 in travel time.
Stocks and bonds are
a. financial assets; therefore, they are considered to be money b. highly-liquid financial assets; therefore, they are considered to be money c. not highly-liquid financial assets; therefore, they are not considered to be money d. widely accepted means of payment; therefore, they are considered to be money e. not financial assets; therefore, they are not considered to be money
If imports are $100 million more than exports, government spending is $500 million, consumer expenditures are $900 million, and investment spending is $600 million, then GDP is
A. $1.9 billion. B. $2.0 billion. C. $1.8 billion. D. $2.1 billion.