An open market sale by the Fed:
A. increases the money supply and increases output.
B. increases the money supply and decreases output.
C. decreases the money supply and increases output.
D. decreases the money supply and decreases output.
Answer: D
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If MPS is equal to 0.15 and MPI is equal to 0.10, an initial change of $19,000 in government expenditure would result in a total change of _____ in income
a. $19,000 b. $16,150 c. $20,000 d. $76,000 e. $126,667
The objective of an economic model is to
a. be an accurate description of reality b. yield better understanding of important relationships c. use simplifying assumptions to make positive economic statements d. use basic principles of economics to derive fundamental assumptions about human behavior e. predict real-world occurrences with complete accuracy
Which of the following correctly portrays a bank's balance sheet?
A. Total Bank Assets = Total Bank Liabilities + Total Bank Capital B. Total Bank Assets = Total Bank Capital - Total Bank Liabilities C. Total Bank Liabilities = Total Bank Capital + Total Bank Assets D. Total Bank Assets = Total Bank Liabilities - Total Bank Capital
Researchers demonstrate conclusively that drinking 4-6 ounces of ginger ale each day increases life expectancy by 3 years. What happens in the market for ginger ale?
A) The equilibrium price falls, and the equilibrium quantity rises. B) The equilibrium price rises, and the equilibrium quantity falls. C) The equilibrium price and quantity rise. D) The equilibrium price and quantity fall.