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Question
In an open economy, which of the following will cause an increase in the size of the multiplier?
A) a reduction in the marginal propensity to import
B) a reduction foreign output
C) an increase in the marginal propensity to save
D) all of the above
E) none of the above
Answer
This answer is hidden. It contains 1 characters.
Related questions
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For this question, assume that investment spending depends only on the interest rate and no longer depends on output. Given this information, a reduction in government spending
A) will cause investment to decrease.
B) will cause investment to increase.
C) may cause investment to increase or to decrease.
D) will have no effect on output.
E) will cause a reduction in output and have no effect on the interest rate.
Q:
Use the IS-LM model to answer this question. Suppose there is a simultaneous increase in taxes and reduction in the money supply. Explain what effect this particular policy mix will have on output and the interest rate. Based on your analysis, do we know with certainty what effect this policy mix will have on investment? Explain.Answer: In this case, the LM curve shifts up and the IS curve shifts to the left. In this case, output will clearly fall. What happens to the interest rate depends on the relative magnitude of the two policies. The effects on I are again ambiguous.14) Use the IS-LM model to answer this question. Suppose there is a simultaneous increase in government spending and increase in the money supply. Explain what effect this particular policy mix will have on output and the interest rate. Based on your analysis, do we know with certainty what effect this policy mix will have on investment? Explain.
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Suppose there is a simultaneous central bank sale of bonds and tax increase. We know with certainty that this combination of policies must cause
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Q:
Under the reasonable dynamic assumptions discussed in the text, a monetary contraction should result in
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Suppose there is a simultaneous fiscal expansion and monetary contraction. We know with certainty that
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For this question, assume that policy makers are pursuing a fixed exchange rate regime. Now suppose that a reduction in stock market wealth causes a decrease in consumption. Which of the following will tend to occur in a fixed exchange rate regime?
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The Marshall-Lerner condition is less likely to hold when
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C) the sensitivity of investment to income is smaller.
D) all of the above
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Because the U.S. traditionally gives more foreign aid than it receives, the U.S. traditionally has a negative value for
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C) investment income.
D) net transfers received.
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E) the inflation rate increases over time, but then rapidly decreases on its own.
Q:
Given nominal money growth, the amount of seignorage will be greater when
A) tax revenues are higher.
B) real money balances are larger.
C) the inflation rate is higher.
D) foreign lending is higher.
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Q:
When the budget deficit is financed entirely through money creation, the real budget deficit is equal to which of the following?
A) ΔH
B) ΔH - ΔP
C) (ΔH)/P
D) (ΔH)/H
E) P[(ΔH)/H]
Q:
Based on our understanding of the U.S. budget, we know that
A) government accounts treat asset sales as revenues.
B) government accounts do not treat asset sales as revenues.
C) the NIPA accounts treat asset sales as revenues.
D) neither the government accounts nor the NIPA accounts treat asset sales as revenues.