The role of the currency exchange rate is embedded in the import expenditure equation as:
A) autonomous import spending.
B) marginal propensity to import.
C) autonomous export spending.
D) none of the above.
A
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Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
The hypothesis that changes in the money supply lead to proportional changes in the price level is called
A) the equation of exchange. B) the Keynesian multiplier. C) the theory of empirical relativity. D) the quantity theory of money and prices.
An increase in the expected inflation rate causes: a. the velocity of money to increase. b. the velocity of money to decrease. c. the actual inflation rate to fall
d. the actual price level to decrease. e. the money supply to increase.
A bank's secondary reserves include its
A. holdings of long-term bonds issued by large corporations. B. passbook saving account balances (a liability to the bank). C. holdings of corporate stock. D. holdings of 6-month Treasury bills.