The relationship between consumption and disposable income is such that:
A. an inverse and stable relationship exists between consumption and income.
B. a direct, but very volatile, relationship exists between consumption and income.
C. a direct and relatively stable relationship exists between consumption and income.
D. the two are usually equal.
C. a direct and relatively stable relationship exists between consumption and income.
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If the money supply is increased, which curve shifts in the IS—LM model? What direction does it shift? What is the intuition behind this shift?
What will be an ideal response?
List and briefly explain the primary goals of the Fed
What will be an ideal response?
A bank will be able to make fewer loans if it
a. sells bonds to the Fed b. calls in loans c. increases loans from excess reserves d. borrows money in the federal funds market e. buys bonds from the Fed
If corporations have their choice, they will prefer to invest using
a. revenue from the sale of stocks. b. revenue from the sale of bonds. c. plowback. d. money borrowed from the bank.