Due to the multiplier effect, a decrease in investment spending
a. is greater than the resulting decrease in GDP
b. has a minimal impact on the economy
c. causes the money supply to increase
d. leads to an even larger decrease in output
e. results in increased autonomous consumption
D
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In comparison to an employer in a competitive labor market, a monopsony employer pays a ________ wage rate and hires ________ workers
A) lower; fewer B) lower; more C) higher; more D) higher; fewer
To escape adverse selection and elicit high quality experience goods buyers can
a. offer price premiums to new firms in the market b. seek out unbranded goods c. buy from generic storefronts that have leased temporary space d. secure warranties from warehouse retailers e. none of the above
If you know the required reserve ratio, then you know how much each bank is holding in reserves
a. True b. False Indicate whether the statement is true or false
Assume a new bank has just opened for business. It has deposits of $1,000,000 and a required reserve ratio of 15 percent. How much can this bank lend, and why?
What will be an ideal response?