Which of the following is an example of expansionary fiscal policy?
a. Increase taxes.
b. Decrease government spending.
c. Increase government spending.
d. Increase taxes and decrease government spending equally.
c
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Refer to Figure 18.1. The opportunity cost of bicycles in Canada is
A) 1/2 of a hang glider. B) 2/3 of a hang glider. C) 2 hang gliders. D) 4 hang gliders.
Under a flexible exchange rate, an increase in the domestic money supply leads to
A) a devaluation of the domestic currency. B) a revaluation of the domestic currency. C) a depreciation of the domestic currency. D) an appreciation of the domestic currency.
The average percentage markup in the economy
a. is of special interest in microeconomics b. fluctuates greatly from year to year c. depends on competitive conditions in the economy d. depends on the level of GDP e. increases as the interest rate increases
Under the modern system of fractional reserve banking, banks
a. keep cash reserves equal to only a fraction of their deposit liabilities. b. loan out their excess reserves at interest, which is the key to their profitability. c. are always potentially vulnerable to runs. d. All of the above are correct.