A. raises the value of the multiplier
B. has no impact on the value of the multiplier?
C. rarely occurs because the MPC is set by congressional legislation
D. lowers the value of the multiplier
Macroeconomic Policy Tools
Suppose a wave of investor and consumer pessimism in the USA causes a reduction in spending If the US federal Reserve (Which has a broader remit than the Bank of England Which is charged only with controlling inflation) chooses to engage in activist stabilization policy it should ?
A. Increase government spending and decrease taxes
B. decrease the money supply
C. decrease government spending and increase taxes
D. decrease interest rates
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 ?
A. None of these answers
B. decrease the quantity demanded of money
C. increase the quantity demanded of money
D. decreases the demand for money
E. increases the demand for money
When an increase in government purchases raises incomes shifts money demand to the right raises the interest rate, and lowers investment we have seen a demonstration of ?
A. supply-side economics
B. None of these answers
C. The crowding-out effect
D. The multiplier effects
Which of the following statements regarding taxes is correct ?
A. Most economists believe that in the short run the greatest impact of a change in taxes is on aggregate supply, not aggregate demand
B. An increase in taxes shifts the aggregate demand curve to the right
C. A decrease in taxes shifts the aggregate supply curve to the left
D. A permanent change in taxes has a greater effect on aggregate demand than a temporary change in taxes.
If the marginal propensity of consume MPC is 0.75 the value of the multiplier is ?
A. 4
B. 7.5
C. 5
D. 0.75
The initial effect of an increase in the money supply is to ?
A. increase the interest rate
B. increase the price level
C. decrease the price level
D. decrease the interest rate
When an increase in government purchases increases the income of some people, and those people spend some of that increase in income on additional consumer goods, we have seen a demonstration of ?
A. The multiplier effects
B. supply side economics
C. None of these answers
D. The crowding out effect
