Firms can acquire access to savings indirectly through ________
A) issuing securities
B) borrowing from banks
C) the payment of taxes to the federal government
D) the depositing of funds in depository institutions
B
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Prices of money market instruments undergo the least price fluctuations because of
A) the short terms to maturity for the securities. B) the heavy regulations in the industry. C) the price ceiling imposed by government regulators. D) the lack of competition in the market.
The size of the marginal propensity to consume determines the size of
a. government spending in the economy. b. the multiplier. c. planned investment in the economy. d. None of these.
If MPC = 0.75, a $40 billion decrease in government purchases would have what size effect on the "first round" of induced added consumption? a. It would increase first round consumption by $30 billion
b. It would increase first round consumption by $40 billion. c. It would increase first round consumption by $120 billion. d. None of the above; the first round effect would be a decrease in consumption.
Investment is a positive function of the national income level
Indicate whether the statement is true or false