Econ

If a country had a trade deficit of $10 billion and then its exports rose by $20 billion and its imports rose by $10 billion, its net exports would now be

$0

A country has $30 billion of domestic investment and net capital outflows of -$20 billion, what is the country's savings?

$10 billion

money multiplier equation

1/r (R written as a decimal)

If the reserve ratio is 4 percent, then the money multiplier is ___

25

which of the following events would shift money demand to the left?

An increase in the interest rate and/or an increase in the price level

NCO=NX

NCO=NX

when deciding how much to save, people care most about

after tax real interest rates

a stock market booms occurs in 2017, which curve shifts and in which direction?

aggregate demand shifts right

All of the presidents of the regional Federal Reserve banks...

attend each FOMC meeting, not all of them have voting rights nor are appointed by the president and approved by the senate

The Feds primary tool to change the money supply is

conducting open market operations

If the Fed sells government bonds to the public, then reserves _____ and the money supply____

decrease and decreases.

people can write checks against....

demand deposits and money market mutual funds

Trade policies

do not affect a country's overall trade balance, but affect some firms or industries differently

permanent tax cuts shift the AD curve:

farther to the right than do temporary tax cuts

Fiat money ...

has no intrinsic value

Money demand refers to

how much wealth people want to hold in liquid form

Fed policy decisions infuluence

inflation and employment

in the long run, an increase in money supply

raises prices and leaves unemployment unchanged.

In 2009 Congress and President Obama approved tax cuts and increased government spending. According to the short-run Phillips curve these policies should have

reduced unemployment and raised inflation.

A decrease in the price level causes real wealth to:

rise, interest rates to fall, and the dollar to depreciate

Suppose that businesses and consumers get much more optimistic about the future of the economy. To stabilize output the Federal Reserve could

sell bonds to raise interest rates.

There is a ______ ______ trade off between inflation and unemplyment

short run

which of the following would not be associated with a favorable supply shock?

the price level rises

Assume the multiplier is 5 and the crowding out effect is $20 billion. An increase in government purchases of $10 billion will shift the aggregate demand curve to:

the right by 30 billion