Author Question: If firms increase their investment spending by 10 million, then the economy's equilibrium output ... (Read 38 times)

awywial · **on:** Jun 30, 2018

If firms increase their investment spending by 10 million, then the economy's equilibrium output rises by exactly 10 million.
a. True
b. False
Indicate whether the statement is true or false

Question 2

Which of the following correctly describes fractional reserve banking?
a. The federal government only insures a fraction of the deposits at most banks.
b. Banks keep a fraction of their loans with other banks to maintain the quality of their loan portfolio.
c. Banks can loan out all but a small fraction of its own money, but must hold all money deposited at the bank on reserve in bank vaults.
d. Banks can loan out all but a fraction of its own money, but must hold all money deposited at the bank on reserve in bank vaults.