Use the aggregate expenditures model and assume the marginal propensity to consume (MPC) is 0.80 . An increase in government spending of $1 billion would result in an increase in GDP of:

A key finding of the economic analysis of financial structure is that

A) the existence of the free-rider problem for traded securities helps to explain why banks play a predominant role in financing the activities of businesses. B) while free-rider problems limit the extent to which securities markets finance some business activities, nevertheless the majority of funds going to businesses are channeled through securities markets. C) given the great extent to which securities markets are regulated, free-rider problems are not of significant economic consequence in these markets. D) economists do not have a very good explanation for why securities markets are so heavily regulated.

The money created by the banking system when deposits in one bank result in deposits in other banks by way of the bank loan process tends to decrease the banking system's volatility

Indicate whether the statement is true or false