If the Fed increases the required reserves, financial institutions would be expected to lend out:
A. less than before, increasing the money supply.
B. more than before, decreasing the money supply.
C. less than before, decreasing the money supply.
D. more than before, increasing the money supply.
Answer: C
Economics
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In 2003, the largest component of U.S. GDP was
a. personal consumption expenditures b. government purchases c. durable goods d. net exports e. gross private domestic investment
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Do policy makers know the exact value of the fiscal multiplier?
a. No, economists have almost no idea of the value of fiscal multipliers. b. No, they are not known with complete accuracy. c. Yes, economists know the precise value of the multiplier. d. Yes, although there is a very small range of uncertainty in the value.
Economics