Valuation
What will be an ideal response?
The process of determining current or projected worth
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Suppose the following information describes the economy:Government purchases of goods and services1,000Household saving1,000Government transfers and interest payments500Tax collections500Business saving1,500Private saving equals ____and public saving equals ________.
A. 2,500; 0 B. 2,500; -1,000 C. 1,000; -500 D. 1,000; 0
If the required reserve ratio is decreased from .2 to .1 the demand deposit expansion multiplier
A) increases from 5 to 10. B) increases from 4 to 4.5. C) decreases from 5 to 2.5. D) decreases from 2 to 1.
The United States typically experiences a large surplus of milk annually. This is caused by
a. a price ceiling in the market. b. not enough demand for milk. c. a price floor in the market. d. overproduction of milk by the cows.
According to the loanable funds model, which of the following events would result in higher interest rates and greater saving?
a. Firms become pessimistic about the future and, as a result, they cut back on their plans to buy new equipment and build new factories. b. The government goes from running a budget deficit to running a budget surplus. c. Congress passes a reform of the tax laws that encourages greater saving. d. Congress passes a reform of the tax laws that encourages greater investment.