Assume an economy with a single bank, no excess reserves, no savings accounts, and no currency held by the public. With a required reserve ratio of .4, the demand deposit expansion multiplier is

The following is an investment schedule. Investment spending is in billions of dollars.

Refer to the data in the table above. Assume that private investment spending is initially $78 billion. If the government finances a deficit and this action increases the interest rate by 2 percentage points, then the government financing would have potentially crowded out:


A. $92 billion of investment spending

B. $17 billion of investment spending

C. $78 billion of investment spending

D. $14 billion of investment spending

A minimum wage

A. increases the number of unskilled workers who are employed. B. increases wages to all unskilled workers. C. increases the wages paid to unskilled workers who are employed. D. increases cyclical unemployment.