Exports minus imports equal net exports.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 2If the Fed buys a 1,000 U.S. government bond from a bank, it pays for it by giving the bank 1,000 in reservesreserves that it simply creates out of thin air.
a. True
b. False
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QUESTION 3The current level of investment depends on the current level of income.
a. True
b. False
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QUESTION 4If the Fed wishes to reduce the money supply, it can sell U.S. government securities to member banks.
a. True
b. False
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QUESTION 5When economists say investment is autonomous, they mean that investment is independent of the level of saving.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 6When the Fed buys U.S. government securities from a bank, that bank's excess reserves and total reserves increase, but there is no change in required reserves.
a. True
b. False
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QUESTION 7The main determinants of investment are the interest rates and expected profit.
a. True
b. False
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QUESTION 8Money supply would expand if people chose to hold borrowed funds in cash rather than in checking accounts.
a. True
b. False
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QUESTION 9An economy's investment demand curve shows the inverse relationship between the quantity of investment demanded and the market interest rate, other things held constant.
a. True
b. False
Indicate whether the statement is true or false
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