We should expect the consumption function to shift downward if
A. real interest rates rise.
B. price levels fall.
C. consumers become more optimistic about future incomes.
D. consumers become more pessimistic about future incomes.
Answer: D
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Suppose a terrorist group bombs a federal building, causing $ 1 million in expenditures on new construction and healthcare for the victims. The new expenditures
A) would be subtracted from the gross domestic product account. B) would be added to the gross domestic product account. C) would be added to the gross domestic product account and subtracted from the national income account. D) would impact GDP in none of the above ways.
Expenditures on education equal about _____ of state and local government financial outlays
a. one quarter b. one third c. one half d. two thirds
The maximum increase in the money supply possible from a deposit of $D into the banking system where R is the reserve requirement is
A. (1 / R)(D? R). B. R× D. C. (1 / R)(1 ? R)D. D. (1 / R)D.
Which of the following statements best describes the 12 Federal Reserve Banks?
A. They are privately owned and privately controlled central banks whose basic goal is to provide an ample and orderly market for U.S. Treasury securities. B. They are privately owned and publicly controlled central banks whose basic goal is to control the money supply and interest rates in promoting the general economic welfare. C. They are privately owned and publicly controlled central banks whose basic goal is to earn profits for their owners. D. They are privately owned and publicly controlled central banks whose basic function is to minimize the risks in commercial banking in order to make it a reasonably profitable industry.