Comparing _____ can give us some sense of what the multiplier actually is in the economy.
A. hard money to M2
B. hard money to M1
C. M1 to M2
D. hard money to fiat money
A. hard money to M2
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What would happen to aggregate demand if the federal government increased military purchases and state and local governments decreased their road building budgets at the same time? a. AD would increase, because only federal government purchases affect AD
b. AD would decrease, because only state and local government purchases affect AD. c. AD would increase if the change in federal purchases were smaller than the change in state and local purchases. d. AD would decrease if the change in federal purchases was smaller than the change in state and local purchases.
Central banks can increase the money supply by:
a. Selling foreign exchange. b. Raising margin requirements. c. Making discount loans. d. All of the above. e. None of the above.
If the economy is currently operating below its institutional production possibilities frontier (institutional PPF), it is
A) in long-run equilibrium. B) in a recessionary gap. C) in an inflationary gap. D) definitely not self-regulating. E) b and d
Some economists argue that since inflation
a. raises the real value of fixed nominal wages, a little inflation may make it easier for labor markets to adjust. b. raises the real value of fixed nominal wages, a little inflation may make it harder for labor markets to adjust. c. reduces the real value of fixed nominal wages, a little inflation may make it easier for labor markets to adjust. d. reduces the real value of fixed nominal wages, a little inflation may make it harder for labor markets to adjust.