The demand for current consumption, as plotted against the interest rate, shifts to the right due to all of the following except
A) a decrease in current taxes.
B) a increase in future taxes.
C) an increase in current income.
D) an increase in future income.
B
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When the Fed buys Treasury securities
A) the budget deficit declines. B) the money supply decreases. C) the money supply increases. D) profits are maximized.
Cautious banks may choose to hold excess reserves instead of lending them
Indicate whether the statement is true or false
Table 36-2 ? Domestic ? ? ? GDP Expenditure ? Exports Imports Total Expenditures (Y) C+ I + G (X) (IM) C+ I + G + (X?IM) $2,500 $3,100 $650 $250 _____ 3,000 3,400 650 300 _____ 3,500 3,700 650 350 _____ 4,000 4,000 650 400 _____ 4,500 4,300 650 450 _____ 5,000 4,600 650 500 _____ 5,500 4,900 650 550 _____ In Table 36-2, assume that exports rise to $900. What is the new equilibrium GDP?
A. $5,000 B. $4,500 C. $4,000 D. $3,500
The U.S. government increases its budget deficit, but at the same time Congress eliminates an investment tax credit. Which of the following is correct?
a. The interest rate will increase; investment may increase or decrease. b. The interest rate will decrease; investment may increase or decrease. c. The interest rate may increase or decrease; investment will decrease. d. The interest rate may increase or decrease; investment will increase.