The potential money multiplier gives us
A. the growth in real national income when the money supply increases.
B. the growth in the money supply when income increases.
C. the maximum potential change in the money supply due to a change in income.
D. the maximum potential change in the money supply due to a change in reserves.
Answer: D
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The entry of new firms into a perfectly competitive market shifts the demand curve outward.
Answer the following statement true (T) or false (F)
Which of the following best describes the concept of laissez-faire?
a. Government should not intervene in the economy b. Government should actively intervene in the economy whenever it judges the action to be beneficial. c. Government should intervene in the economy only to promote short-term economic stability. d. Government should intervene in the economy only to maximize long-term growth rates. e. Government should intervene in the economy only when the economy is not at full employment or there is substantial inflation.
Assume that foreign capital flows from a nation increase due to political uncertainly and increased risk. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and net nonreserve international borrowing/lending balance in the context of the Three-Sector-Model? a. The real risk-free interest rate rises and
net nonreserve international borrowing/lending balance becomes more positive (or less negative). b. The real risk-free interest rate falls and net nonreserve international borrowing/lending balance becomes more negative (or less positive). c. The real risk-free interest rate rises and net nonreserve international borrowing/lending balance becomes more negative (or less positive). d. The real risk-free interest rate and net nonreserve international borrowing/lending balance remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Imports equal
A. 1 - exports. B. net exports/exports. C. exports + (exports - imports). D. exports - net exports.