This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: A decrease in the tax rate will ________ the disposable income of households and ________ the size ... (Read 121 times)

craiczarry

  • Hero Member
  • *****
  • Posts: 527
on: Jun 29, 2018
A decrease in the tax rate will ________ the disposable income of households and ________ the size of the multiplier effect.
 
  A) decrease; decrease
  B) decrease; increase
  C) increase; decrease
  D) increase; increase
  E) increase; not change

Question 2

If the required reserve ratio is 100 percent, could the Federal Reserve still change the money supply with open market operations? Explain whether they could or could not.
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

lkoler

  • Sr. Member
  • ****
  • Posts: 358
Reply #1 on: Jun 29, 2018
Answer to Question 1

D

Answer to Question 2

The Federal Reserve could still change the money supply, because the initial purchase or sale of government securities would change checking account deposits. For instance, if the Fed purchases a 1,000 government bond from you and you deposit the funds in the bank, then checking account deposits and the money supply would go up 1,000. The simple deposit multiplier with a 100 percent required reserve ratio would equal one, not zero, so an increase in reserves still increases checking account deposits.


craiczarry

  • Member
  • Posts: 527
Reply 2 on: Jun 29, 2018
Wow, this really help

epscape

  • Member
  • Posts: 335
Reply 3 on: Yesterday
Gracias!

« previous next »
 

Did you know?

All adverse reactions are commonly charted in red ink in the patient's record and usually are noted on the front of the chart. Failure to follow correct documentation procedures may result in malpractice lawsuits.

Did you know?

Parkinson's disease is both chronic and progressive. This means that it persists over a long period of time and that its symptoms grow worse over time.

Did you know?

The top five reasons that children stay home from school are as follows: colds, stomach flu (gastroenteritis), ear infection (otitis media), pink eye (conjunctivitis), and sore throat.

Did you know?

Though “Krazy Glue” or “Super Glue” has the ability to seal small wounds, it is not recommended for this purpose since it contains many substances that should not enter the body through the skin, and may be harmful.

Did you know?

Excessive alcohol use costs the country approximately $235 billion every year.

The role of leptin in regulating appetite and metabolic rate. The role of leptin in regulating appetite and metabolic rate.
The mark-recapture technique is often used to estimate population size. The mark-recapture technique is often used to estimate population size.
Tubal ligation. To minimize the size of the incisions necessary, laparoscopic surgery may be used to Tubal ligation. To minimize the size of the incisions necessary, laparoscopic surgery may be used to
The Head Start program was designed to increase the school readiness of low-income children. The Head Start program was designed to increase the school readiness of low-income children.
Relative size ranges and fluorescent dye labeling colors of 16 STR Relative size ranges and fluorescent dye labeling colors of 16 STR
Polyploidy increases fruit size Polyploidy increases fruit size
Video: Mendel's Principles of Dominance, Segregation and Independent Assortment

For a complete list of videos, visit our video library