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Questions and Answers

(1123 solutions)

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If the marginal propensity to consume (MPC) is 0.80, the value of the multiplier is _______.

c. 5...

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Posted by Cleveland on September 17, 2024
The initial impact of an increase in government spending is to shift _______.

a. aggregate demand to the right...

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Posted by Cleveland on September 17, 2024
Suppose a pandemic causes a reduction in consumer spending. If the Federal Reserve chooses to engage in activist stabilization policy, it should _______.

c. increase the money supply and decrease interest rates...

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Posted by Cleveland on September 17, 2024
The long-run effect of an increase in the money supply is to _______.

b. increase the price level...

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Posted by Cleveland on September 17, 2024
The initial effect of an increase in the money supply is to _______.

d. decrease the interest rate...

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Posted by Cleveland on September 17, 2024
In the market for real output, the initial effect of an increase in the money supply is to _______.


c. shift aggregate demand to the right...

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Posted by Cleveland on September 17, 2024
For the United States, the most important source of the downward slope of the aggregate-demand curve is _______.

d. the interest-rate effect...

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Posted by Cleveland on September 17, 2024
When the supply and demand for money are expressed in a graph with the interest rate on the vertical axis and the quantity of money on the horizontal axis, an increase in the price level _______.

a. shifts money demand to the right and increases the interest rate...

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Posted by Cleveland on September 17, 2024
When money demand is expressed in a graph with the interest rate on the vertical axis and the quantity of money on the horizontal axis, an increase in the interest rate _______.


c. decreases the quantity demanded of money...

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Posted by Cleveland on September 17, 2024
Keynes's liquidity preference theory of the interest rate suggests that the interest rate is determined by _______.

d. the supply and demand for money...

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Posted by Cleveland on September 17, 2024