Which of the following will be observed if the Fed raises the reserve requirement?
a. The deposit expansion multiplier will fall
b. The discount rate will decline
c. The interest rate ceilings will fall
d. Excess reserves will increase
e. Money supply will increase
a
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Distinguish between investment goods and consumption goods. If you buy a car, is it investment or consumption? What if IBM buys a car? Are inventories a consumption or investment good?
What will be an ideal response?
Which was not a factor in causing the Great Depression?
a. the end of a boom in construction b. the crash of the stock market c. a struggling agriculture sector d. structural weakness in the banking system e. All of the above were factors causing the Great Depression.
Smart Sam can make a $200 investment that yields $1000 50% of the time and $0 50% of the time. What is his expected return on the investment?
a. $200 b. $300 c. $400 d. $500
As world economies start to recover from the 2008 financial crisis and firms expect profits to increase,
A) the U.S. short-run aggregate supply curve immediately will shift rightward. B) investment will increase and there will be a movement up along the aggregate demand curve. C) the price level in the U.S. will decrease as firms increase investment. D) both investment and aggregate demand will increase.