Which of the following is true of the consumption function?
a. A decrease in flat tax results in an upward shift of the consumption function
b. An increase in interest rates results in an upward rotation of the consumption function.
c. An increase in the expected future income results in an upward rotation of the consumption function.
d. A decrease in the marginal propensity to save results in a downward shift of the consumption function.
a
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Everything else held constant, an increase in the excess reserve ratio will mean ________ in the M1 money multiplier and ________ in the M2 money multiplier
A) an increase; an increase B) no change; an increase C) a decrease; a decrease D) no change; a decrease
Suppose that a bank has $500 million in asset X, $400 million in asset Y, and $200 million in asset Z. Each asset has a different risk weight. The risk weight for asset X is 40%, the risk weight for asset Y is 70%, and asset Z has zero risk. The amount of risk-weighted assets for this bank is ____________ million. Assuming that the bank has to hold capital equal to 8% of its risk-weighted assets,
the bank must hold _____________ million in capital. A) $480; $38.4 B) $1,100; $88 C) $1,100; $880 D) $340; $27.2
Voluntary trade promotes economic progress because it
What will be an ideal response?
GDP in an economy is $4,600 billion. Consumer expenditures are $3,500 billion, government purchases are $900 billion, and gross private domestic investment is $400 billion. Net exports are:
a. -$400 billion b. +$200 billion c. +$400 billion d. -$200 billion