If a bank has total assets of $1 000 000 and bank capital of $200 000, what is the leverage ratio?

Question 14 options:

0.2

0.8

5

20

Which statement best describes the impact of theMPCon AD?

Question 16 options:

The greater theMPC, the greater the change in government purchases required to achieve a given change in AD.

The greater theMPC, the smaller the fraction of an increase in AD due to an increase in government purchases that is consumption.

The smaller theMPC, the greater the fraction of an increase in AD due to an increase in government purchases that is consumption.

The smaller theMPC, the greater the change in government purchases required to achieve a given change in AD.

Other things being equal, what effect will an expansionary fiscal policy tend to have?

Question 17 options:

It will decrease investment.

It will decrease consumption.

It will increase interest rates.

It will increase net exports.

Which of the following circumstances will shift AD to the left, other things being equal?

Question 18 options:

when the government budget surplus increases because government purchases rose

when the government budget surplus increases because transfer payments rose

when the government budget surplus decreases because taxes rose

when the government budget surplus decreases because government purchases rose

When the crowding-out effect of an increase in government purchases is included in the analysis, what is the effect on AD?

Question 19 options:

AD shifts right, but by less than the simple multiplier analysis would imply.

AD does not change.

AD shifts left.

AD shifts right, but by more than the simple multiplier analysis would imply.