1. Government budget deficit constitutes 5% of GDP, current account surplus is 100, disposable income of...

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1. Government budget deficit constitutes 5% of GDP, current account surplus is 100, disposable income of households is 2000, investment two times smaller than private saving and is 6 times smaller than consumption. What is the value of government spending? * (2 Points) 1150 150 1000 1850 2. If a central bank adheres to strict interest rate targeting and money demand increases due to more competition in banking, a central bank should * (2 Points) increase money supply to the same extent increase money supply to a smaller extent decrease money supply to the same extent decrease money supply to a greater extent 1. Government budget deficit constitutes 5% of GDP, current account surplus is 100, disposable income of households is 2000, investment two times smaller than private saving and is 6 times smaller than consumption. What is the value of government spending? * (2 Points) 1150 150 1000 1850 2. If a central bank adheres to strict interest rate targeting and money demand increases due to more competition in banking, a central bank should * (2 Points) increase money supply to the same extent increase money supply to a smaller extent decrease money supply to the same extent decrease money supply to a greater extent

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1 Government spending represents onethird of the total nat... View the full answer