Last year, total income increased $1,000 and consumption increased $800 . An increase in government spending equal to $10 would cause output to increase by $_____ because the multiplier is ______

A decline in the interest rate will lead to an increase in the price of capital, supply of capital remaining constant

a. True b. False Indicate whether the statement is true or false

By decreasing the required reserve ratio, the Federal Reserve will

A. increase the money supply unless accompanied by a decrease in the discount rate. B. increase the money supply unless banks hold on to excess reserves instead of lending them. C. decrease the money supply by the amount of the initial change caused by the decreased required reserve ratio. D. decrease the money supply by a multiple of the initial change caused by the decreased required reserve ratio.