Question: Please answer the T/F questions 11-20 on the image 11. [T/F] (2pt) In the goods market we learned in class, the investment does not depend
Please answer the T/F questions 11-20 on the image
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11. [T/F] (2pt) In the goods market we learned in class, the investment does not depend on income Y. Let's change this assumption and instead assume that gonverment tax goes up when income goes up. In this new model, if the government spending goes up by 1 dollar, the equilibrium output should go up by more than 1/(1 - c1) dollar, where c1 is the marginal propensity to consume. 12. [T/F] (2pt) if the animal spirit is high, people consume less, and hence the equilibrium output is lower in the short run. 13. [T/F] (2pt) Government saving is an exogeneous variable in the standard goods market model we studied in class 14. [T/F] (2pt) The United States has a positive net capital outflow due to trade. 15. [T/F] (2pt) Bond price is positively related to the interest rate. 16. [T/F] (2pt) Money supply is controlled by the Fed, and hence it is an exogeneous variable in the standard money market model we studied in class. 17. [T/F] (2pt) The Fed can have a full control of what the money multiplier is. 18. [T/F] (2pt) In an expansionary open market operation, the Fed sells bonds. 19. [T/F] (2pt) In a crisis when people don't trust the commercial banks, people want to hold more cash. In that situation, money multiplier will decrease as well. 20. [T/F] (2pt) IS-LM combine the goods market equilibrium and the money market equilibrium
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