Suppose that consumer spending is expected to decrease in the near future. If output is at potential output, which of the following policies is most appropriate according to the AS/AD model?
A. A reduction in government spending
B. An increase in taxes
C. An increase in government spending
D. No change in taxes or government spending
Answer: C
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Financial markets
A) channel funds indirectly between borrowers and lenders. B) channel funds directly from lenders to borrowers. C) act as go-betweens by holding a portfolio of assets and issuing claims based on that portfolio to savers. D) generally provide lenders with lower returns than do financial intermediaries.
Which of the following would be classified as private investment?
a. An individual's purchase of a used car b. A family's purchase of groceries c. An individual's purchase of a General Electric bond d. A family's purchase of a newly built home e. A family's purchase of a new car
If net exports decrease, the expenditure schedule will
a. get steeper. b. get flatter. c. shift upward. d. shift downward.
A bank with $200 million in deposits has $15 million of cash in the bank and $10 million in deposits with the Fed. Its total reserves equal
A. $25 million. B. $10 million. C. $225 million. D. $15 million.