With consumption expenditure on the vertical axis and disposable income on the horizontal axis, the consumption function intersects the 45 degree line at $8 trillion. This result indicates that
a) autonomous consumption spending is $8 trillion
b) consumption spending is $8 trillion when disposable income is $8 trillion
c) consumption spending is less than $8 trillion because taxes must be paid
d) consumption spending is more than $8 trillion because taxes have been paid
b) consumption spending is $8 trillion when disposable income is $8 trillion
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Without someone actually coming into the bank to demand a loan, there is no process of money creation
Indicate whether the statement is true or false
When the Fed raises the legal reserve requirement, it
a. lowers the cost of borrowing from the Fed, allowing banks to make more loans b. raises the cost of borrowing from the Fed, disallowing banks from making the same quantity of loans c. increases the amount of excess reserves that banks hold, allowing them to make more loans d. increases the amount of excess reserves that banks hold, disallowing them from making the same quantity of loans e. decreases the amount of excess reserves that banks hold, disallowing them from making the same quantity of loans
The market equilibrium quantity:
A. is sometimes the socially optimal quantity. B. maximizes total economic surplus. C. is the socially optimal quantity. D. is not the socially optimal quantity.
Exhibit 3-3 Demand curves
Which of the graphs in Exhibit 3-3 depicts the effect of a decrease in the price of pizza on the demand curve for pizza?
A. Graph A. B. Graph B C. Graph C. D. Graph D.