A depreciation of the domestic currency,

a depreciation of the foreign currency,

central bank’s interventions

46. Suppose the full-employment level of output is $680, the equilibrium level of output is $600, the MPC is 0.80, and there is a 0.25 income tax. Full-employment output can be achieved by a

$20 decrease in taxes,

$25 increase in government spending,

$30 decrease in taxes,

$40 increase in government spending

$40 decrease in taxes

47. A recessionary gap exists when

aggregate supply exceeds aggregate demand,

the aggregate spending line intersects the 45° line at an output level to the right of the full-employment level of output,

the aggregate spending line intersects the 45° line at an output level to the left of the fully employment level of output,

the aggregate spending line intersects the aggregate supply curve at a lower price level,

the aggregate spending line intersects the aggregate supply curve at a higher price level

48. The paradox of thrift maintains that a society's desire to save more

Lowers the equilibrium level of output and has no effect upon the amount saved,

lowers the equilibrium level of output and the amount saved,

lowers the equilibrium level of output and increases the amount saved,

has no effect upon the equilibrium level of output and increases the amount saved,

increases the equilibrium level of output and the amount saved.

49. Suppose banks hold no excess reserves and reserves total $1200. When the reserve requirement is lowered from 0.12 to 0.10, check-writing deposits

increase from $1000 to $1200,

increase from $10,000 to $12,000,

decrease from $1200 to $1000,

decrease from $ 12,000 to $ 10,000.

increase by $1200

50. If the Ml money supply is $400, velocity is 4, and there is a 10% growth in the money supply and a 25% increase in velocity, nominalGDP should increase from

$1200 to $1600,

$1600 to $1760,

$1600 to $2200,

$1760 to $2200,

$1200 to $1760.

51. Cost-push inflation exists when

consumers use their market power to push up prices,

Resource owners use their market power to push up prices,

potential output is growing faster than real GDP,

real GDP is increasing faster than potential GDP

all of the above.

52. Personal income

Is income received by individuals during a given year,

is the income individuals have available for spending during a given year,

equals national income less indirect taxes,

is the sum of wages plus interest received by individuals during a given yea

equals consumption plus saving.

53. Gross national product equals Gross domestic product plus

net indirect taxes;

net current transfers from abroad

net foreign factor income;

net exports;

None of the above.

54. Which of the following results in an increase in the value of the dollar:

Interest rates in the United States decrease.

Interest rates in foreign countries increase.

Price level in the United States increases.

Productivity in the United States increases.

Output in the United States increases.

55. As a measure of economic welfare, gross domestic product underestimates a country's production of goods and services when there is an increase in

The production of antipollution devices

Crime prevention services

The production of military goods

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