The term money multiplier refers to:
The ratio of the change in the money supply to the change in the monetary base
The ratio of government spending to the level of GDP
The ratio of taxes to disposable income
The ratio of investment to savings in an economy
Correct Answer :
A. The ratio of the change in the money supply to the change in the monetary base
Related Questions
The term marginal propensity to consume (MPC) is defined as:
The change in consumption resulting from a change in disposable income
The total amount of consumption in an economy
The change in investment resulting from a change in interest rates
The change in saving resulting from a change in disposable income
The term price elasticity of supply measures:
The responsiveness of quantity supplied to changes in price
The responsiveness of quantity demanded to changes in price
The responsiveness of consumer preferences to changes in price
The responsiveness of production costs to changes in price
Which of the following is an example of a public good?
National defense
A private car
A pair of shoes
A restaurant meal
The term commodity money refers to:
Money that has intrinsic value, such as gold or silver
Money that is backed by the government's promise to exchange it for a commodity
Money that is used for international trade
Money that is created by the central bank
The term balance of trade refers to:
The difference between a country's exports and imports of goods and services
The difference between government revenues and expenditures
The difference between a country's savings and investments
The difference between the government budget deficit and surplus
The term deflation refers to:
A decrease in the overall price level of goods and services in an economy
An increase in the overall price level of goods and services in an economy
A decrease in the purchasing power of a currency
An increase in the purchasing power of a currency
The term government budget surplus occurs when:
Government revenues exceed government expenditures in a given period
Government expenditures exceed government revenues in a given period
Government revenues and expenditures are equal in a given period
Taxes are too high
The term marginal propensity to save (MPS) refers to:
The change in saving resulting from a change in disposable income
The total amount of saving in an economy
The change in consumption resulting from a change in disposable income
The total amount of consumption in an economy
Which of the following is an example of fiscal policy?
The Federal Reserve adjusting interest rates
The government increasing spending on infrastructure projects
The government selling bonds to the public
The central bank conducting open market operations
The term regressive tax refers to a tax:
That takes a larger percentage of income from low-income individuals than from high-income individuals
That takes a larger percentage of income from high-income individuals than from low-income individuals
That is the same for all individuals regardless of income level
That is only imposed on corporations
The term real interest rate is:
The nominal interest rate adjusted for inflation
The interest rate charged by banks on loans
The interest rate earned on a savings account
The interest rate set by the central bank
If the government implements contractionary fiscal policy, it will likely lead to:
Lower inflation and lower economic growth
Higher inflation and higher economic growth
Higher inflation and lower economic growth
Lower inflation and higher economic growth
The term market equilibrium refers to a situation where:
The quantity supplied is equal to the quantity demanded in a market
The quantity supplied exceeds the quantity demanded in a market
The quantity demanded exceeds the quantity supplied in a market
The price level is constant in a market
The term structural unemployment refers to unemployment that occurs due to:
Mismatch between the skills of workers and the skills required by employers
Fluctuations in the business cycle
Temporary transitions between jobs
Changes in aggregate demand
The term economic rent refers to:
Payment for the use of land or other natural resources that is in excess of what is needed to bring the resource into production
The payment for the use of capital goods in production
The total revenue earned by a firm
The total cost of producing a good or service
The term circular flow of income refers to:
The continuous flow of goods and services between households and firms in an economy
The circular flow of money between households and firms in an economy
The circular flow of resources between households and firms in an economy
The circular flow of exports and imports in an open economy
Which of the following is a measure of income inequality?
Gini coefficient
Consumer Price Index (CPI)
Producer Price Index (PPI)
Lorenz curve
The term externalities refers to:
The uncompensated impact of one person's actions on the well-being of a bystander
The difference between the private cost and the social cost of producing a good
The total cost incurred in producing a good or service
The total cost of producing all units of a good or service
Which of the following is a measure of the overall level of prices in an economy?
Consumer Price Index (CPI)
Gross Domestic Product (GDP)
Money Supply (M2)
Aggregate Demand (AD)
The term marginal propensity to consume (MPC) refers to:
The change in consumption resulting from a change in disposable income
The total amount of consumption in an economy
The change in investment resulting from a change in interest rates
The total amount of saving in an economy
The long-run aggregate supply curve is vertical because it is determined by:
The level of government spending
The level of potential output
The level of aggregate demand
The level of inflation
The term monetary base refers to:
The total amount of money in circulation in an economy
The total amount of money held by banks as reserves
The total amount of money held by households and businesses
The total amount of money created by the central bank
If the government decreases taxes and increases government spending, it is implementing:
Expansionary fiscal policy
Contractionary fiscal policy
Expansionary monetary policy
Contractionary monetary policy
The term budget constraint refers to:
The limit on the total amount of money a consumer can spend
The limit on the total amount of money a government can borrow
The limit on the total amount of money a firm can invest
The limit on the total amount of money a central bank can print
If the economy is in a recessionary gap, it implies that:
Actual output is less than potential output
Actual output is greater than potential output
The inflation rate is high
The unemployment rate is low
Which of the following is a measure of the responsiveness of quantity demanded to a change in price?
Price elasticity of demand
Cross-price elasticity of demand
Income elasticity of demand
Price elasticity of supply
The term liquidity refers to:
The ease with which an asset can be converted into cash without loss of value
The total amount of money in circulation in an economy
The total amount of money held by households and businesses
The total amount of money held by banks as reserves
The term complementary input refers to inputs that are:
Used together in the production process
Used interchangeably in the production process
Completely unrelated in the production process
Unrelated to the production process
The term deficit spending refers to a situation where:
The government's expenditures exceed its revenues in a given period
The government's revenues exceed its expenditures in a given period
The government's expenditures are equal to its revenues in a given period
The government borrows money from the central bank
The term sticky prices refers to:
Prices that do not change quickly in response to changes in supply and demand
Prices that are set by the government and cannot be changed by firms
Prices that are adjusted continuously in response to changes in the economy
Prices that are set by monopolies to maximize profit