solution

According to the equation of exchange it M-5400P-8, and Y-5200 thin

A) the price level must fall

?) net domestic product is 5800

V cannot be determined

35) Unemployment compensation programs are called automatic stabilizers because payments increase during

A) recessions C) wartime only

Bj both recessions and expansions Dj expansionary periods.

36) When private expenditures decrease as a result of increased government spending this is known as

A) government deficit spending

Q the multiplier effect

By the crewding out effect D) the stabilizer effect

37) Other things being equal, if the required reserve ratio is raised from 10 pement to 20 percent, A) maximum potential value of the money maltiplier rises from 10 to 20

B) maximum potential value of the money multiplier falls from 10 tos

C) minimum potential value of the money multiplier rises from 0.10 to 0:20 D) minimum potential value of the money multiplier falls from 100 to 30

38) Which of the following fiscal policy actions would be most appropriate during a ressionary gap? B) Increasing goverment spending D) Increasing interest rates

A) Increasing the money supply

C) Increasing taxes