Let the marginal leakage rate be 0.5 while the marginal propensity to consume is 0.8. Then a $50 million reduction in autonomous taxes will cause autonomous consumption to ________ and equilibrium income to ________
A) fall by $50 billion; fall by $100 billion
B) rise by $50 billion; rise by $100 billion
C) fall by $40 billion; fall by $200 billion
D) rise by $40 billion; rise by $80 billion
D
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Since the year _____, all depository institutions are subject to the Fed's legal reserve requirements.
Fill in the blank(s) with the appropriate word(s).
If a freeze destroys much of the crop of an agricultural nation, then
A) the desired investment curve would shift to the left. B) the desired investment curve would shift to the right. C) net foreign lending would increase. D) net foreign lending would decrease.
There is ________ relationship between inflation and central bank independence and ________ relationship between long-run rates of unemployment and central bank independence
A) a negative; no B) a negative; a negative C) a positive; no D) a positive; a negative
Why may a central bank intervene in the foreign exchange market when its currency is depreciating?
A) concerns about the country's exports becoming less competitive B) concerns about inflation C) concerns about deflation D) to sterilize the effects on the domestic economy