The _____ is the overall economic effect of government spending increases.
A. spending effect
B. multiplier effect
C. fiscal effect
D. incentive effect
Answer: B
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Which of the following tools does the Fed use to pursue its objectives?
A) It influences short-run and long-run interest rates. B) It provides loans to new firms and businesses at extremely low rates of interest. C) It determines the efficient level of government spending. D) It influences market prices through price ceilings and price floors.
Which of the following would most likely increase the price of chicken, a normal good?
a. a reduction in the price of grains used to produce chicken feed b. a reduction in the price of beef, a substitute for chicken c. unusually hot weather that kills millions of chickens before they are ready for market d. a decrease in consumer income
Which of the following Federal Reserve Banks is most instrumental in carrying out the policy directives of the Board of Governors?
A. The Federal Reserve Bank of Richmond B. The Federal Reserve Bank of St. Louis C. The Federal Reserve Bank of San Francisco D. The Federal Reserve Bank of New York
Answer the following questions true (T) or false (F)
1. If currency speculators decide that the value of the dollar should rise in the future relative to the yen, this will increase the demand for dollars and decrease the supply of dollars. 2. A real appreciation of the dollar is caused by either a nominal appreciation of the dollar, a rise in the foreign price level, or a fall in the U.S. price level. 3. A rise in the dollar price of the Chinese yuan signals an appreciation of the yuan and a depreciation of the dollar.