Question
Hello, can you help me with these problems. Thank you very much! 22. According to the model developed in Chapter 3, when government spending increases
Hello, can you help me with these problems. Thank you very much!
22. According to the model developed in Chapter 3, when government spending increases and taxes increase by an equal amount:
A)Consumption and investment both increase.
B)Consumption and investment both decrease.
C)Consumption increases and investment decreases.
D)Consumption decreases and investment increases.
26. The money supply consists of:
A) Currency plus reserves.
B) Currency plus the monetary base.
C) Currency plus demand deposits.
D) The monetary base plus demand deposits.
27. If currency held by the public equals $100 billion, reserves held by banks equal $50 billion, and bank deposits equal $400 billion, then the money supply equals:
A) $100 billion.
B) $150 billion.
C) $500 billion.
D) $550 billion.
31. If rr is the ratio of reserves to deposits, and cr is the ratio of currency to deposits, then the money multiplier is equal to.
A) (rr + 1)/ (rr + cr)
B) (cr + 1)/ (cr + rr)
C) (rr + cr)/ (rr + 1)
D) (rr + cr)/ (cr + 1)
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