Assume there is a multiplier effect, some crowding out, and no accelerator effect. An increase in government expenditures changes aggregate demand more,
a. the smaller the MPC and the stronger the influence of income on money demand.
b. the smaller the MPC and the weaker the influence of income on money demand.
c. the larger the MPC and the stronger the influence of income on money demand.
d. the larger the MPC and the weaker the influence of income on money demand.
d
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Which of the following is NOT a part of the Federal Reserve System?
A) the Federal Deposit Insurance Corporation B) the Board of Governors C) the Twelve District Federal Reserve banks D) the Federal Open Market Committee
Asymmetric information can exist before, but not after, a transaction.
Answer the following statement true (T) or false (F)
Suppose you are producing where MC = AVC = $3 and this is loss minimizing. If market reports predict that the price of your product will reach a long-run equilibrium level that is $4 higher than it is today, you should
a. increase output in advance of the expected price increase b. remain in business c. shut down d. remain in business only if your most efficient production level has an average total cost less than or equal to $7 e. shut down until the price increases, then get back in business
The term shutdown
a. and the term exit both refer to short-run decisions that a firm might make. b. and the term exit both refer to long-run decisions that a firm might make. c. refers to a short-run decision that a firm might make, whereas the term exit refers to a long-run decision that a firm might make. d. refers to a long-run decision that a firm might make, whereas the term exit refers to a short-run decision that a firm might make.