If planned investment decreases as the interest rate increases, the absolute value of the tax multiplier will be
A) the same as the absolute value of the tax multiplier that would result if planned investment were independent of the interest rate.
B) larger than the absolute value of the tax multiplier that would result if planned investment were independent of the interest rate.
C) smaller than the absolute value of the tax multiplier that would result if planned investment were independent of the interest rate.
D) zero.
Answer: C) smaller than the absolute value of the tax multiplier that would result if planned investment were independent of the interest rate.
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Linder's hypothesis provides an explanation for
A) increasing returns to scale. B) imperfect competition. C) intraindustry trade. D) All of the above.
Which of the following statements concerning bank regulation in the United States is TRUE?
A) The Office of the Comptroller of the Currency has the primary responsibility for state banks that are members of the Federal Reserve System. B) The Federal Reserve and the state banking authorities jointly have responsibility for the state banks that are members of the Federal Reserve System. C) The Office of the Comptroller of the Currency has sole regulatory responsibility over bank holding companies. D) The state banking authorities have sole regulatory responsibility for all state banks.
At any point along the LM curve,
A) the quantity of money demanded equals the quantity of money supplied. B) the economy must be in general equilibrium. C) the nominal interest rate must equal the real interest rate. D) saving must equal investment.
In a business cycle, a peak marks the end of an expansion and the beginning of a recession
a. True b. False Indicate whether the statement is true or false