The smaller the MPS, the larger the multiplier.
Answer the following statement true (T) or false (F)
True
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Most doctors are employed by the government and most hospitals are owned by the government in
A) Canada. B) Japan. C) the United Kingdom. D) the United States.
The interest-rate-based transmission mechanism assumes that the Fed can stimulate investment by
A) selling bonds. B) buying bonds. C) raising the discount rate relative to the federal funds rate. D) raising the required reserve ratio.
If the Fed simultaneously raises the discount rate and the reserve requirement, the money supply will:
A. expand. B. contract. C. remain unchanged. D. take on a value that cannot be determined from the information given.
The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.