If the Fed wanted to decrease the money supply, one way to make an enormous impact would be to:
A. decrease the reserve requirement, which would increase the money multiplier.
B. increase the reserve requirement, which would decrease the money multiplier.
C. increase the reserve requirement, which would increase the money multiplier.
D. decrease the reserve requirement, which would decrease the money multiplier.
Answer: B
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A) is more inelastic than the demand curve for the product. B) is inelastic at high prices and elastic at lower prices. C) is perfectly inelastic. D) is the same as the market demand curve.
If interest rates fall without any corresponding change in income, then it is possible according to the IS-LM model that
a. money demand fell and government spending declined. b. the money supply increased and taxes declined. c. tight monetary policy and easy fiscal policy. d. easy monetary policy and easy fiscal policy.
How is the R2 value calculated, and what information does this give you?
What will be an ideal response?
What can a nation do to increase its economic growth? Why is economic growth among the major national economic goals of all countries?