When an economy is operating well below its full-employment ...

[SO00]

When an economy is operating well below its full-employment capacity and the marginal propensity to consume is 0.75, a 10 billion increase in investment spending will cause the equilibrium output to rise by:
 a. 5 billion.
  b. 10 billion.
  c. 20 billion.
  d. 40 billion.

Question 2

Which of the following is not a component of the M1 money supply?
 a. Demand deposits.
  b. Large-denomination (more than 100) bills.
  c. Interest-earning checking deposits.
  d. Outstanding balances on credit cards.

[jesse.fleming]

Answer to Question 1

d

Answer to Question 2

d