National income is equal to ________.
A. rent + transfer payments + interest + wages
B. gross investment - depreciation + indirect business taxes - net foreign income
C. wages + rent + interest + profits and losses
D. net investment + depreciation + net exports + net foreign income
Answer: C
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Based on the above table, an open market operation in which the Fed purchased $100,000 of government securities would
A) lead to a maximum potential expansion of the money supply of $1 million. B) create a reserve deficiency for the banking system. C) cause demand deposits to fall by $100,000. D) lead to a maximum potential expansion of the money supply of $100,000.
Which of the following is NOT an advantage of a correctly specified structural model?
A) Structural models may help us to more accurately predict the effect that monetary policy has on economic activity. B) A structural model provides more pieces of evidence about monetary policy's effect on economic activity. C) Structural models may allow economists to more accurately predict the impact institutional changes have on the link between monetary policy and income. D) A structural model imposes no restrictions on the way monetary policy affects the economy.
What is a recession?
(A) A very mild and short expansion. (B) A period when the economy is neither expanding nor contracting. (C) A period when real GDP falls for at least six months. (D) A long and severe depression.
A change in the reserve requirement changes
A) the monetary base. B) the money multiplier. C) the discount rate. D) all of the above E) none of the above