Use the following table to answer the next question. The money supply and investment are in billions.Money Supply (billions of dollars)Interest RateInvestment (billions of dollars)$507%$100606110705120804130903140Assume that the MPC is 0.9 and the reserve requirement is 0.2. If the Federal Reserve needs to increase aggregate demand by $100 billion at each price level to move the economy back to full employment and the current interest rate is 6%, then the Federal Reserve should ________ the money supply by ________.
A. increase, $10 billion
B. increase, $20 billion
C. decrease, $20 billion
D. decrease, $10 billion
Answer: A
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If at some interest rate desired investment is $400 billion, desired private saving is $600 billion, and the budget deficit is $300 billion, is there a surplus or a shortage in the market for loanable funds? What does this imply would happen to interest rates?
Transfer payments are
What will be an ideal response?
At an output of 12, ATC is $12 and price is $9. At an output of 13, ATC is $12.40 and price is $9. MC = MR at an output of 12.6. At that output the firm will
A. take a loss. B. break-even. C. make a profit.
If a model assumes that people take into account other people's interests, it is probably a:
A. traditional model. B. natural model. C. heuristic model. D. behavioral model.