Homework Answers
Output will increase
Explanation: Increased government spending is one of the solutions to liquidity trap and government spending can build confidence and increase output in liquidity trap.
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Question 2 0.2 pts An increase in government spending will cause which of the following when...
Question 4 0.2 pts When a liquidity trap situation exists, the most appropriate policy to increase...
Question 4 0.2 pts When a liquidity trap situation exists, the most appropriate policy to increase output would be: a central bank purchase of bonds. an increase in government spending. O an increase in taxes. a central bank sale of bonds. a decrease in government spending.
13) An open market purchase of bonds by the central bank will cause which of the following when a liquidity trap situati...
13) An open market purchase of bonds by the central bank will cause which of the following when a liquidity trap situation exists? A) The money supply, M, will not change. B) Output will increase. C) The interest rate will decrease. D) The interest rate will not change. E) none of the above 14) Which of the following is a liability on a bankʹs balance sheet? A) loans B) checkable deposits C) reserves D) all of the above E) none...
When an economy is experiencing a recession and the MPC = 4/5, a $5 billion dollar increase in government spending will cause output to increase by
1. When an economy is experiencing a recession and the MPC = 4/5, a $5 billion dollar increase in government spending will cause output to increase by $20 billion $400 million $25 billion $160 million2. Which of the following is the most frequently used monetary policy tool of the Federal Reserve to change the money supply? the discount rate open market operations changing tax rates the required reserve ratio3. During the 2008-2009 recession, the Federal Reserve provided additional liquidity into the financial system. This ultimately reduced the federal funds rate, which...
17) The IS curve will shift when which of the following occurs? A) a reduction in...
17) The IS curve will shift when which of the following occurs? A) a reduction in output. C) a reduction in consumersʹ confidence. B) a reduction in interest rate. D) a reduction in money supply. 18) When a liquidity trap situation exists, the most appropriate policy to increase output would be A) a central bank purchase of bonds. B) an increase in government purchase. C) a central bank sale of bonds. D) none of the above 19) Which of the...
Assume that there is a simultaneous increase in government spending and a monetary contraction. In a...
Assume that there is a simultaneous increase in government spending and a monetary contraction. In a flexible exchange rate regime, we know with certainty that such a policy mix will cause which of the following? A depreciation of the domestic currency None of the other answers is correct. A decrease in the domestic interest rate. O A decrease in output. A decrease in net exports.
Question 5 0.2 pts All else equal, which of the following would cause an increase in...
Question 5 0.2 pts All else equal, which of the following would cause an increase in output per effective worker? an increase in population an increase in technology a doubling of both capital and labor a doubling of capital and technology an increase in capital per effective worker
(1) Other things being equal, which of the following will increase aggregate expenditures? Group of answer...
(1) Other things being equal, which of the following will increase aggregate expenditures? Group of answer choices An increase in domestic prices relative to foreign prices A decrease in the interest rate A decrease in real wealth An increase in income taxes A decrease in government purchases of goods and services (2) If the current unemployment rate is 5 percent and the natural unemployment rate is 6 percent, then the economy is Group of answer choices producing a level of...
Question 1 0.2 pts Which of the following conditions will most likely coincide with the existence...
Question 1 0.2 pts Which of the following conditions will most likely coincide with the existence of a liquidity trap? Individuals prefer to hold only money and not bonds. O The real interest rate is negative. Inflation is rising. Inflation is constant. OInflation is zero.
Question 71 1 pts Which of the following is the best example of a government spending?...
Question 71 1 pts Which of the following is the best example of a government spending? wage payments to firefighters sales tax on consumer products social security payments to households Question 72 1 pts True or False: If the price of cars increase (without knowing price changes in other markets), that must mean that inflation is occurring False True Question 73 1 pts True or False: If the interest rate increases, firms are less likely to start new businesses (ceteris...
19) Fiscal stimulus is: a) An increase or decrease in government spending. b) An increase in...
19) Fiscal stimulus is: a) An increase or decrease in government spending. b) An increase in government spending or a decrease in taxes. c) Achieved when government dollars are spent on consumer goods but not on military goods. d) The difference between equilibrium output and full-employment output.
Question 4 0.2 pts When a liquidity trap situation exists, the most appropriate policy to increase output would be: a central bank purchase of bonds. an increase in government spending. O an increase in taxes. a central bank sale of bonds. a decrease in government spending.
Assume that there is a simultaneous increase in government spending and a monetary contraction. In a flexible exchange rate regime, we know with certainty that such a policy mix will cause which of the following? A depreciation of the domestic currency None of the other answers is correct. A decrease in the domestic interest rate. O A decrease in output. A decrease in net exports.
Question 5 0.2 pts All else equal, which of the following would cause an increase in output per effective worker? an increase in population an increase in technology a doubling of both capital and labor a doubling of capital and technology an increase in capital per effective worker
Question 1 0.2 pts Which of the following conditions will most likely coincide with the existence of a liquidity trap? Individuals prefer to hold only money and not bonds. O The real interest rate is negative. Inflation is rising. Inflation is constant. OInflation is zero.
Question 71 1 pts Which of the following is the best example of a government spending? wage payments to firefighters sales tax on consumer products social security payments to households Question 72 1 pts True or False: If the price of cars increase (without knowing price changes in other markets), that must mean that inflation is occurring False True Question 73 1 pts True or False: If the interest rate increases, firms are less likely to start new businesses (ceteris...
19) Fiscal stimulus is: a) An increase or decrease in government spending. b) An increase in government spending or a decrease in taxes. c) Achieved when government dollars are spent on consumer goods but not on military goods. d) The difference between equilibrium output and full-employment output.
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