The IS-LM model tells us that output remains constant when a tax cut is combined with ________ in the money supply, with the interest rate ________ its initial level
A) an increase, rising above
B) an increase, falling below
C) a decrease, rising above
D) a decrease, falling below
C
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If the price of paint increases, the substitution effect will cause
a. people to paint their homes more often b. people to use more paint than they did before c. the quantity of paint demanded to increase d. the quantity of paint supplied to decrease e. people to use less paint
The figures in the table below are for a single commercial bank. All figures are in thousands of dollars.
Refer to the data given above. If the reserve ratio is 10 percent and a check for $10,000 is drawn and cleared in favor of another bank, then the actual reserves of the bank above will:
A. Still be $40,000
B. Decrease $10,000
C. Decrease $11,000
D. Decrease $9,000