By lowering the legal reserve requirement, the Fed restricts banks' abilities to make loans
Indicate whether the statement is true or false
F
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In an economy, the government wants to increase aggregate demand by $50 billion at each price level to increase real GDP and reduce unemployment. If the MPC is 0.6, then it would increase government purchases by
A. $31.25 billion. B. $10 billion. C. $20 billion. D. $40.50 billion.
A surplus will tend to occur at which price in Figure 4-21?
A. P1 B. P2 C. P3 D. There will be no surplus at the prices shown.
Consider the expressions T - G and Y - T - C. Which of the following statements is correct?
a. Each one of these is equal to national saving. b. Each one of these is equal to public saving. c. The first of these is private saving; the second one is public saving. d. The first of these is public saving; the second one is private saving.
A contractionary supply shock would most likely result in
A) an increase in aggregate demand B) an increase in national income C) an increase in GDP D) a decrease in the general price level E) a decrease in employment