The balanced budget multiplier is
A) positive because the magnitude of government expenditure multiplier is larger than the magnitude of tax multiplier.
B) negative because the magnitude of government expenditure multiplier is larger than the magnitude of the tax multiplier.
C) positive because the magnitude of government expenditure multiplier is smaller than the magnitude of tax multiplier.
D) equal to zero.
E) negative because the magnitude of the tax multiplier is larger than the magnitude of the government expenditure multiplier.
A
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At higher interest rates, banks will want to hold more reserves.
Answer the following statement true (T) or false (F)
If the price elasticity of demand for apples is greater than 1, an increase in apple prices will
A) raise total revenue. B) lower total revenue. C) not affect total revenue. D) either raise or lower total revenue, but it is impossible to determine which.
In a commercial bank's T-account, reserves and outstanding loans are recorded as:
A. debts. B. profits. C. assets. D. liabilities.
The figure below represents the U.S. market for steel imports from South Korea. The South Korean government provides an export subsidy of $25 per ton, and South Korean firms use the subsidy to reduce their export price to the United States to $375 per ton.
The change in national welfare in the United States when the South Korean government provides an export subsidy of $25 per ton is
A. + $375 million. B. + $4.125 billion. C. -$4.5 billion. D. - $3.75 billion.