According to the Keynesian model, an increase in autonomous investment leads to
A) a more than proportional decrease in real Gross Domestic Product (GDP).
B) a less than proportional decrease in real Gross Domestic Product (GDP).
C) a proportional increase in real Gross Domestic Product (GDP).
D) a reduction in taxes, autonomous government spending, and a fall in real Gross Domestic Product (GDP).
A
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Devaluation of a currency is
a. reduction in its domestic value due to inflation b. reduction in its international value due to changes in supply and demand c. reduction in its international value due to government decree d. reduction in the value of other currencies e. all of the above
Answer the following questions true (T) or false (F)
1. If the Fed wishes to decrease the supply of money and credit, it may sell government securities, raise the discount rate, or lower required reserve ratios. 2. The Fed was founded in 1913 to serve as lender of last resort to bankers during bank runs and panics. 3. If the rate of growth in real GDP exceeds the rate of growth in the money supply, the quantity theory of money predicts a price deflation.