Author Question: Which of the following would increase the size of the government purchases multiplier? A) an ... (Read 89 times)

Hungry! · **on:** Jun 29, 2018

Which of the following would increase the size of the government purchases multiplier?

A) an increase in the quantity of imports purchased by households from an increase in income
B) a decrease in the amount saved by households from an increase in income
C) an increase in the tax rate
D) a decrease in the amount of consumption spending by households from an increase in income

Question 2

While many analysts defended the actions taken by the Fed and the Treasury to respond to the financial crisis in 2008, others were critical of these actions. The critics were concerned that by not allowing large firms to fail

A) stockholders and bondholders of these firms were not allowed to receive the proceeds from the sale of assets that would have occurred if the firms had declared bankruptcy.
B) there is an increased likelihood that other firms will engage in risky behavior in the future with the expectation that they will also not be allowed to fail.
C) there will be less competition in the U.S. economy, which could led to higher prices for consumers.
D) smaller firms will resent not receiving similar assistance.