12. Which of the following would be added to U.S. national income? a. an America
ID: 1110047 • Letter: 1
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12. Which of the following would be added to U.S. national income? a. an American consumer buying French wine b. an American business selling aircraft to British Airways c. a Swedish firm selling mobile phones to Americans d. a French firm buying a Swedish cellular phone 13. The circular flow diagram is best described as a (n) a. abstraction of little value in macroeconomics. b. exact representation of the cause and effect relationship between spending and c. model that clarifies the relationship between spending and income. d. model to explain the relationship betwee n the federal deficit and tax revenues 14. The nation's disposable income increases by $400 billion and, as a result, consumer spending increases by $320 billion. Therefore, the MPC equals a. 0.16 b. 0.20 c. 0.80 d. 0.96 15. Which of the following definitions of the money supply includes only the most I iquid forms of money? a. MI b. M2 c. savings deposits. d. money market mutual deposits. in government securities from member banks. If the oversimplified money multiplier is assumed, then the mone supply will 16. Assume the required reserve ratio is 10 percent and the FOMC orders an open market sale of $50 milli a. increase by $500 million. b. increase by $100 million. c. decrease by $100 million. d. decrease by $500 million. a. Mi is a small number, and should be increased in size. b. c. d. 17. The M2 definition of the money supply is based on the concept that many types of deposits can be used as both payments and stores of value. checking deposits are used for payments, and therefore, not part of M1. cash is not used for the majority of payments. 18. Fractional reserve banking takes its name from the fact that banks a. hold only a fraction of their reserves at the bank itself. b. keep only a fraction of their total deposits on reserve. c. lend only a fraction of their total reserves to customers. d. reserve only a fraction of their activity for lending.Explanation / Answer
12)The answer is B) an american business selling aircraft to british airways.
it will add in nation income of U.S because, american business having profits by selling aircraft to british airways and it is a exports to a country.
13) The answer is C-) model that clarifies the relationship between spending and income.
because , the circular flow model represent the behavior of household spending and thier income, when household provides factors of production and firms provides goods and services, when household are factor of production, the firms gives him wages, rent , salaries etc. then household consume the good and services produced by firm. thus it clarifies the relationship between spending and income.
14) The answer is C-) 0.80.
becaue MPC =change in consumtion / change in income
MPC = 320/400 = 0.80
15) The asnwer is A -) M1.
Because M1 includes, demand deposits, cash in hand, checking deposits and other forms of money which are easiluy converted into cash.
16 and all) please upload it again. its against chegg policy .
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