c. all banks are "loaned up"
d. the number of loans must decrease
e. all banks are suffering a loss
_ 122. If the required reserve ratio is 0.25 and the First National Bank holds $10 million in demand deposits and $2.5
million in reserves, how much more m
the short-run macro model is flawed and inaccurate
the classical model is flawed and inaccurate
the two models measure completely different aspects of the economy
in the short run, spending affects output, but not in the long run
in the sho
_ 13. If net taxes decrease by $500 billion, both household disposable income and consumption spending will
increase by $500 billion.
_ 14. Use the table below to determine the impact on consumption spending of a $100 increase in net taxe
_ 24. Refer to Figure 11-7. If the economy is currently producing at point X, what does the short-run macro model
predict will happen?
a. Nothing will happen; the economy is in equilibrium.
b. Prices will rise and firms will increase production.
c. It sells new government bonds to the public
d. It borrows money directly from the Federal Reserve
e. It asks the Federal Reserve to print money to pay for the deficit.
_ 61. In a recession, tax payments tend to increase and transfer payments tend to de
money backed by gold
_ 92. The means of payment function of money refers to the common unit for measuring how much something is
_ 93. The Federal Reserve was or
_ 107. A bank's balance sheet shows
a. information about the riskiness of its loans
b. the amount of money loaned to each individual borrower
c. the amount of cash in the hands of the public
d. the number of checking accounts it maintains
e. the bank's as
_ 77. Infrastructure projects result in the most value from a fiscal stimulus but a problem is that
a. there are technological issues that need to be solved.
b. they are too complex to impl
_ 45. The difference between the number of workers employed if the economy was operating at full employment
and the number of workers currently employed given aggregate expenditures is known as
a. cyclical unemployment
b. frictional unemployment
Identify the choice that best completes the statement or answers the question.
1. In the short run,
a. spending determines income, but not the other way around
b. income determines spending, but not the other way around