Define & Describe
The function of money as a store of value is "blank" related to the rate of inflation.
inversely, negatively
In the goods and services market, aggregate demand is made up of
consumption, investments, government purchases, and net exports
List all of the automatic stabilizers.
progressive income tax, unemployment insurance, and transfer payments
In a fractional reserve banking system:
banks keep less than 100 percent of deposits in cash.
bank reserves are always greater than bank loans.
banks can never experience a banking panic.
total reserves always equal required reserves.
banks keep less than 100 percent of deposits in cash.
Liquidity refers to
the ability of an asset to be easily converted into money.
An economy with income less than the natural rate and rising inflation will generate a "blank" gap.
stagflation
A cut in net taxes tends to "blank" the economy less than an increase in government purchases.
expand
Contractionary monetary policy is a strategy by the Federal Reserve Bank to "blank" the supply of money and "blank" economic activity.
decrease/lower, restrain
The crowding out effect refers to the tendency of expansionary "blank" policy to "blank" interest rates.
fiscal, raise
Other things being equal, a reduction in aggregate demand will likely increase:
wages, price level, RGDP, or unemployment?
unemployment
If the government decides to raise taxes to prevent inflation, this is an example of "blank" fiscal policy or fiscal "blank".
contractionary, restraint
The money multiplier describes how much a change in reserves affects "blank"
demand deposits
Neutrality of money states in the long run, a one-time increase in the money supply leads to no change in "blank".
real output/GDP
Other things being equal, an increase in the short-run aggregate supply curve will cause an increase in "blank" and a decrease in "blank".
RGDP, price level
For the equation of exchange, if the velocity of money is 4 and the money supply is $2000, then "blank" gross domestic product is "$"?
nominal, $8,000
If there is an increase in the money supply, the interest rate "blank" and equilibrium quantity of money stock "blank".
decreases, increases
The theory of the twin deficits states there is a positive relationship between
large budget deficits and large current account deficits.
In the loanable funds market, a change in the interest rate implies:
the demand curve shifts to the left.
All are correct.
the demand curve shifts to the right.
a movement along the demand curve.
All are correct.
If DY increases by $5,000.00 and C increases by $4,000.00, then mpc is "blank" and mps has to be "blank".
0.8, 0.2
Other things being equal, a decrease in the discount rate by the FRB will cause savings:
to remain the same at foreign banks.
to increase at U.S. banks.
to remain the same at U.S. banks.
to increase at foreign banks.
to increase at foreign banks.