Roughly what is the required reserve ratio within the U.S. banking system?
A) Less than 10 percent.
B) 15%
C) 25%
D) 50%
E) 90%
A
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What is velocity of money?
A) It is the number of times households convert bonds to money to facilitate economic transactions. B) It is the rate at which money supply is spent to obtain the goods and services that make up GDP during a particular time period. C) It is the rate at which money supply can grow while keeping the price level stable. D) It is the number of times the money supply is spent to obtain the goods and services that make up GDP during a particular time period.
If the marginal propensity to consume (MPC) is 0.75, and if policy makers wish to increase real GDP by $300 million, then by how much would they have to change taxes?
a. -$300 million. b. -$200 million. c. -$100 million. d. -$50 million.