Voluntary programs are dependable ways to protect the environment.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 2If people choose to hold some of a newly received loan as cash instead of keeping it in a checking account, _____.
a. the money supply will not increase as much as it would had borrowers deposited all of the money
b. the money supply will remain unchanged
c. the money supply will decrease as much as it would had borrowers deposited all the money
d. the banking system will collapse
e. the economy will experience a recession
QUESTION 3Which of the following best describes the simple spending multiplier?
a. It shows the magnified change in planned aggregate spending that arises from a change in output.
b. It shows the magnified change in equilibrium output demanded that arises from a change in income.
c. It shows the magnified change in planned aggregate spending that arises from a change in equilibrium output.
d. It shows the magnified change in equilibrium output demanded that arises from a given initial change in planned aggregate spending.
e. It shows the change in planned aggregate spending that arises from a change in real output.
QUESTION 4Requiring cars in Los Angeles to reduce pollution by the same amount as cars in Topeka is inefficient.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5The actual money multiplier is smaller than the simple money multiplier because:
a. the actual multiplier affects M2 rather than M1.
b. cash withdrawals reduce the amount banks can lend out.
c. the actual multiplier affects the amount of excess reserves each bank holds.
d. the size of the simple multiplier depends on the volume of deposits unlike the actual multiplier.
e. the actual multiplier uses a different measure of reserve requirements.
QUESTION 6The fraction of a change in disposable income that is consumed is called _____.
a. autonomous consumption
b. induced consumption
c. the multiplier
d. the marginal propensity to consume
e. the marginal propensity to save