Question

QUESTION 1

1. The change in MPS is defined as ____________.

   	a.	disposable income divided by saving
   	b.	saving divided by disposable income
   	c.	the change in disposable income divided by the change in saving
   	d.	the change in saving divided by the change in disposable income

1 points   

QUESTION 2

1. Discouraged workers are those individuals who _____.

   	a.	are getting paid too little
   	b.	do not like their job
   	c.	are working part time but are looking for a full-time job
   	d.	have given up looking for a job

1 points   

QUESTION 3

1. In years with inflation, nominal GDP increases ________ real GDP

   	a.	at the same rate as
   	b.	sometimes faster, sometimes slower, and sometimes at the same rate as
   	c.	faster than
   	d.	slower than

1 points   

QUESTION 4

1. The size of the money multiplier increases ________.

   	a.	with the increase in the currency-deposit ratio (cr)
   	b.	as the central bank decreases the discount rate
   	c.	as the central bank undertakes open market sales
   	d.	with a decrease in the reserve-deposit ratio (θ)

1 points   

QUESTION 5

1. The monetary-base ___________.

   	a.	is the supply of money in the economy
   	b.	is currency held in the hands of the public
   	c.	is the reserves in the banking system
   	d.	is also called high-powered money

2. Just need the answers, no explanation

Answer 1

Q1

Marginal Propensity to save represents the amount saved with respect to the disposable income.

Hence change in MPS = Change in Saving/ Change in disposable income

Hence option d is correct

Q2

Discouraged Workers are not able to find jobs hence are discouraged and hence have given up looking for job.

Hence option d is correct

Q3

Nominal GDP depends on two components quantity and rate of products while real GDP depends only on quantity, rates are fixed.Since there is inflation Nominal GDP will increase at faster rate. Hence option c is correct

Q4

Size of money multiplier = 1/ Reserve ratio

Hence decrease in reserve ratio will increase the money multiplier. HEnce option d is correct

Q5

Monetary base is also called High powered money because of its potential to multiply and increase the overall money supply.

Hence option d is correct