1.The spending multiplier effect becomes bigger ifa. the MPC becomes bigger and the MPM becomes smallerb. both the MPC and the MPM become biggerc. both the MPC and the MPM become smallerd. the MPC becomes smaller and the MPM becomes bigger2. "The U.S. Department of Commerce has estimated that if U.S. manufacturers use metric measures, their increasedability to compete on world markets should increase exports by about $600 million and thus benefit the U.S. economyby between $1.2 billion and $1.8 billion." These numbers suggest thata. exports have a much smaller multiplier impact than other kinds of spending.b. the export spending multiplier is between 2 and 3.c. it takes between $1.2 and $1.8 billion increase in income to generate a $600 million increase in exports.d. imports should increase by between $1.2 and $1.8 billion.3. The functions of the Federal Reserve System include all of the following, except:a.controlling the money supplyb. promoting the stability of the financial systemc.regulating and supervising banksd. issuing deposit insurance to banks4.The reserve requirement exists so that commercial banksa.can guarantee that depositors will get their money back if the bank fails.b.are able to make sure that the bank can repay any discount window loans.c.can cover losses due to bad loans.d.are able to satisfy depositor requests to withdraw their money.5.The term structure of interest rates isa.the relationship among interest rates of different bonds with the same maturity.b.the structure of how interest rates move over time.c.the relationship among interest rates on bonds with different maturities.d.the comparison of terms to maturity of different bonds.

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1.The spending multiplier effect becomes bigger if a. the MPC becomes bigger and the MPM becomes smaller b. both the MPC and the MPM become bigger c. both the MPC and the MPM become smaller d. the MPC becomes smaller and the MPM becomes bigger

1.The spending multiplier effect becomes bigger if a. the MPC becomes bigger and the MPM becomes smaller b. both the MPC and the MPM become bigger c. both the MPC and the MPM become smaller d. the MPC becomes smaller and the MPM becomes bigger

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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