Need Help with these questions and explanation on what they are please! If the h

Question

Need Help with these questions and explanation on what they are please!

If the horizontal axis measures the quantity of bank reserves and the vertical axis measures the interest rate, the demand curve for bank reserves ________.

A.slopes down

B.slopes up

C.is perfectly elastic

D.is perfectly inelastic

The ________ due to a countercyclical policy during a recession is ________ when wages are downwardly rigid than when wages are flexible.

A.increase in employment; lower

B.increase in interest rates; lower

C.increase in taxes; higher

D.increase in employment; higher

Which of the following is likely to happen due to quantitative easing by the Fed?

A leftward shift of the demand curve for bank reserves

B.A leftward shift of the supply curve of bank reserves

C.A rightward shift of the demand curve for bank reserves

D.rightward shift of the supply curve of bank reserves

Which of the following is likely to happen if the quantity of bank reserves held at the Fed increases?

A.The number of loans issued by banks decrease.

B.The real interest rate increases.

C.The stock of money in the economy increases.

D.Bank deposits decrease.

If the federal funds rate is set by the Taylor rule and the output gap increases by 5 percentage points, everything else remaining unchanged, the federal funds rate should ________.

A.increase by 5 percentage point

B.increase by 2.5 percentage points

C.decrease by 5 percentage points

D.decrease by 2.5 percentage points

Which of the following should be increased during a recession?

A.Government spending

B.Nominal interest rate

C.Real interest rates

D.Income taxes

If the value of a

governmentminustaxation

multiplier is 1.8, which of the following is likely to be true if all other variables remain unchanged?

A.

A $1 increase in taxation increases gross domestic product by $1.80.

B.A $1.80 reduction in taxation increases gross domestic product by $1.80.

C.A $1 reduction in taxation increases gross domestic product by $1.80.

D.A $1.80 increase in taxation increases gross domestic product by $1.80.

Explanation / Answer

a.slopes up

b.increase in unemployment is lower

c.rightward shift in supply of bank reserves

c.the stock of money in the economy incrases

a.government spending

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