Have couple study guide questions i was not sure about and needed help on. Please let me know if the following statements are true or false:
1) Keynesians believed that during a recession, wage rates would fall and interest rates would stimulate the economy, thereby bringing the economy back to its sustainable level of output.
2) If the federal reserve bank raises the reserve requirement from 10% to 25% the new money multiplier will be 5.
3) If people anticipate an expansionary monetary policy, higher price levels will be the only effect of the policy.
4) Investments in human capital, physical capital, and technological development, shift the production possibilities curve outward and contribute to economic growth.
5) If the marginal propensity to consume is 75%, the spending multiplier will be 4.
Have couple study guide questions i was not sure about and needed help on. Please let me know if the following statements are true or false:
1) Keynesians believed that during a recession, wage rates would fall and interest rates would stimulate the economy, thereby bringing the economy back to its sustainable level of output.
2) If the federal reserve bank raises the reserve requirement from 10% to 25% the new money multiplier will be 5.
3) If people anticipate an expansionary monetary policy, higher price levels will be the only effect of the policy.
4) Investments in human capital, physical capital, and technological development, shift the production possibilities curve outward and contribute to economic growth.
5) If the marginal propensity to consume is 75%, the spending multiplier will be 4.
