In the cause-effect chain linking changes in the banks' excess reserves and the resulting changes in output and employment in the economy:
A. A decrease in aggregate demand will increase output
B. An increase in the money supply will decrease the rate of interest
C. A decrease in excess reserves will increase the money supply
D. A decrease in the rate of interest will decrease aggregate demand
B. An increase in the money supply will decrease the rate of interest
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Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
Sales tax is an example of an indirect business tax
Indicate whether the statement is true or false
Imports enter the calculation of GDP
A. with a negative sign. B. through the personal consumption category. C. as an addition to changes in private inventories. D. with a positive sign.
The current deficit is
A. the deficit minus current expenditures. B. the deficit minus depreciation. C. the deficit plus net interest payments. D. the deficit minus government investment.