An expansionary monetary policy that successfully counteracts a recession has the side effect of
A) lower investment spending than if no action had been taken.
B) a larger government deficit than if no action had been taken.
C) a higher price level than if no action had been taken.
D) lower output than if no action had been taken.
C
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The minimum percent of deposits that banks must hold and cannot loan is determined by the
A) interest rate. B) discount rate. C) required reserve ratio. D) federal funds rate. E) ratio of M2 to M1.
A contractionary fiscal policy negates some of the leftward shift of the aggregate demand curve because the resulting fall in interest rates
A) increases the quantity of investment, raises the exchange rate and boosts net exports. B) discourages savings, decreases the quantity of investment, raises the exchange rate, and reduces net exports. C) increases the quantity of investment, lowers the exchange rate, and boosts net exports. D) discourages savings, increases consumption, and reduces the quantity of investment and imports.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, an increase in unemployment may be represented by the movement from
A. B to A. B. A to C. C. C to D. D. B to D.
What are the two types of demand that make up total demand for money?
What will be an ideal response?