What is the multiplier? What does it determine? Why does it matter?
What will be an ideal response?
The multiplier is the amount by which a change in autonomous expenditure is multiplied to determine the change in equilibrium expenditure and real GDP. A change in autonomous expenditure changes real GDP by an amount determined by the multiplier. The multiplier matters because it tells us how much a change in autonomous expenditure changes equilibrium expenditure and real GDP.
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When the exchange rate falls, imports ________ and exports ________
A) increase; decrease B) increase; increase C) decrease; do not change D) decrease; decrease E) decrease; increase
Which of the following facilitates the movement of checks across the country?
a. Board of Governors b. Treasury Department c. Federal Open Market Committee d. Federal Reserve Banks e. Department of Commerce