Per-capita income of a country is determined by ________
A) multiplying its gross domestic product by the total number of goods produced during that year.
B) dividing its gross domestic product by the total population of the country during that year.
C) multiplying its gross domestic product by the total population of the country during that year.
D) dividing its gross domestic product by the total number of goods produced during that year.
B
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If an economy is in a liquidity trap, then the nominal interest rate is ________ and the only effective policy that can be used to stimulate the economy is ________
A) zero or negative; expansionary fiscal policy B) zero or negative; expansionary monetary policy C) high and rising; contractionary monetary policy D) high and rising; expansionary monetary policy E) high and rising; expansionary fiscal policy
If the Fed decreases the required reserve ratio at a time when banks are holding no excess reserves, the Fed is: a. forcing banks to increase the money supply
b. forcing banks to decrease the money supply. c. making it possible for banks to increase the money supply but not forcing them to do so. d. making it possible for banks to decrease the money supply but not forcing them to do so. e. conducting open market operations but not changing the money supply.