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Author Question: There has been a decrease in investment. As a result, real GDP will ________ in the short run, and ... (Read 74 times)

fasfsadfdsfa

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on: Jun 29, 2018
There has been a decrease in investment. As a result, real GDP will ________ in the short run, and ________ in the long run.
 
  A) increase; decrease to its initial value B) decrease; decrease further
  C) decrease; increase to its initial level D) increase; increase further

Question 2

Why do banks create money? Do they create money to help the Federal Reserve control the money supply or is there a more basic reason?
 
  What will be an ideal response?


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Sierray

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Reply #1 on: Jun 29, 2018
Answer to Question 1

C

Answer to Question 2

Banks create money to make a profit. Banks create money when they make loans. The loans take the form of checking account deposits. Asking why banks create money is the same as asking why they make loans.


fasfsadfdsfa

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Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)

sarah_brady415

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Reply 3 on: Yesterday
Excellent

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