If the required reserve ratio increases and the monetary base is unchanged, the value of the money multiplier will ________ and the value of the money supply will ________
A) decline; decline
B) decline; increase
C) increase; decline
D) increase; increase
A
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In a simple economy without government or foreign trade, any income not consumed is called
A) net investment. B) depreciation. C) saving. D) investment.
In 1973, the Organization of Petroleum Exporting Countries (OPEC) engineered a quadrupling of oil prices by restricting oil production. Which of the following is an appropriate description of this negative supply shock?
A) The AS curve likely shifted to the left and output likely fell because of this adverse shock. B) In the short-run there was a movement out of general equilibrium leading to an increase in inflation as a likely result of this adverse shock. C) In the short-run there was a movement out of general equilibrium leading to an increase in unemployment as a likely result of this adverse shock. D) all of the above E) none of the above
If those who consumed common resources were subject to a tax that was equal to the external costs that they imposed due to the negative externality created:
A. an efficient level would be reached. B. total surplus would be maximized for the whole society. C. individuals would consume less. D. All of these statements are true.
In the open-economy macroeconomic model, the supply of loanable funds comes from
a. the sum of domestic investment and net capital outflow. b. the sum of national saving and net capital outflow. c. national saving. d. net exports