Government payments made to ________ firms in order to encourage ________ are called subsidies.
A. foreign; immigration
B. domestic; imports
C. foreign; imports
D. domestic; exports
Answer: D
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Why do banks create money? Do they create money to help the Federal Reserve control the money supply or is there a more basic reason?
What will be an ideal response?
Which of the following is true of the simple spending multiplier
a. It equals the ratio of the marginal propensity to consume to the marginal propensity to save. b. It equals the difference between the marginal propensity to save and the marginal propensity to consume. c. It is the reciprocal of the marginal propensity to save d. It is the reciprocal of the marginal propensity to consume. e. It is the sum of the marginal propensity to consume and the marginal propensity to save.
Explain the relationship between interest rates and the demand for money, as described by the Keynesians
The monetarist and the Keynesian approaches are two competing theories of aggregate demand.
Answer the following statement true (T) or false (F)