In the monetarist view, the money supply affects the economy
a. through investment spending and government spending.
b. indirectly through interest rates.
c. directly, apart from interest rates.
d. by altering the size of the money multiplier.
c
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What is the largest source of tax revenue for the U.S. federal government and what is the largest expenditure item of the U.S. federal government?
What will be an ideal response?
In 1995 House Speaker Newt Gingrich threatened to send the United States into default on its debt. During the day of this announcement, U.S. interest rates rose and the real exchange rate of the U.S. dollar depreciated. Which of these changes is consistent with the results of the open-economy macroeconomic model?
a. the increase in U.S. interest rates b. the depreciation of the real exchange rate of the U.S. dollar c. Both a and b are consistent. d. Neither a nor b are consistent.