Refer to the information provided in Figure 23.8 below to answer the question(s) that follow.
Figure 23.8Refer to Figure 23.8. The amount of planned investment increases if the interest rate
A. remains at 8%.
B. drops from 8% to 4%.
C. rises from 4% to 8%.
D. remains at 4%.
Answer: B
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Suppose the Fed buys $1 million of government securities from Bank One, a large commercial bank. Bank One's reserves ________ and its deposits ________
A) increase by $1 million; do not change B) increase by $1 million; increase by $1 million C) do not change; increase by $1 million D) do not change; do not change E) decrease by $1 million; do not change
If the multiplier is 3, equilibrium real GDP is $1,000 billion, and investment is $400 billion, what will happen if investment decreases to $380 billion? Real GDP will:
a. increase to $1,020 billion. b. increase to $1,060 billion. c. decrease to $980 billion. d. decrease to $940 billion. e. decrease to $970 billion.
How do transfer payments function as negative taxes?
What will be an ideal response?
All of the following are important sources of growth except:
A. capital accumulation. B. decreasing returns to scale. C. institutions with incentives compatible with growth. D. technological development.