If you deposit $1,000 in cash in your checkable deposit at your bank, the quantity of M1 immediately
A) increases by $1,000.
B) decreases by $1,000.
C) does not change in size.
D) increases by $2,000.
E) changes, but more information about the required reserve ratio is necessary to determine the amount of the change.
C
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What is an automatic stabilizer?
A) It refers to a discretionary policy that is triggered when actual output is not equal to potential output to improve the economy's performance. B) It refers to a stabilization program that keeps inflation in check automatically. C) It refers to any government program that tends to reduce fluctuations in GDP automatically. D) It refers to a government program that is automatically triggered when the economy enters a recession.
If you save $20 when you experience a $80 rise in your income
A. your MPC is 0.75. B. your MPS is 0.8. C. your MPC is 0.8. D. your MPS is 0.4.