Assume that national income = $4,000 . C = $500 + 0.80(Y), and intended investment = $200 . Then all of the following are true except
a. saving at Y = $0 is -$500
b. national income will increase
c. there will be $100 of unplanned investment in inventories
d. actual investment will equal $300
e. production will decrease
B
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You decide to work in London for the next 5 years, accumulate some savings, then move back to the United States and convert your savings from British pounds to dollars
At the time of your move, economists predict that consumers in the United States have lost their affinity for British products, and expect that this declining preference for British products will continue for the next decade. How should this influence your decision to work and save in London? A) You should be discouraged as the declining U.S. preference for British goods should decrease the value of the pound to the dollar and decrease the value of your savings when converted to dollars. B) You should be discouraged as the declining U.S. preference for British goods should increase the value of the pound to the dollar and decrease the value of your savings when converted to dollars. C) You should be encouraged as the declining U.S. preference for British goods should decrease the value of the pound to the dollar and raise the value of your savings when converted to dollars. D) You should be encouraged as the declining U.S. preference for British goods should increase the value of the pound to the dollar and raise the value of your savings when converted to dollars.
At what stage of the securitization process was moral hazard a major problem?
a. Mortgage origination. b.Due diligence and mortgage servicing. c. Securitization. d. All of the above
If the reserve ratio is 8 percent, then the money multiplier is
a. 12.5. b. 11.5. c. 13.5. d. 8.
Refer to the given figure where the nominal interest rate equals 6 percent and the money supply equals 600.
If the Federal Reserve wants to set the nominal interest rate at 10 percent, it must conduct open market ________ to set the money supply at ________.
A. purchases; 800 B. purchases; 200 C. sales; 800 D. sales; 200