How might fiscal policy be used to correct an inflationary gap?
A) The exchange rate would be adjusted to encourage imports.
B) The exchange rate would be adjusted to discourage imports.
C) The interest rate would be adjusted to encourage saving.
D) Taxes would be increased to reduce aggregate demand.
D
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In the simple deposit expansion model, a decline in checkable deposits of $1,000 when the required reserve ratio is equal to 10 percent implies that the Fed
A) sold $1,000 in government bonds. B) sold $100 in government bonds. C) purchased $1,000 in government bonds. D) purchased $100 in government bonds.
For a collective consumption good, market demand is found by ______
a. horizontally summing individual demand curves b. vertically summing individual demand curves c. estimating a market demand function based on survey data d. estimating a market demand function based on data from similar goods having market pricing