A fall in interest rates is likely to
Increase aggregate demand
Increase savings
Decrease consumption
Decrease exports
Open market operations occur when the government
Reduces spending
Buys and sells bonds and securities
Increases taxation
Increases the exchange rate
The precautionary demand for money is
An idle balance
An active balance
Directly related to interest rates
Inversely related to income
In a regressive tax system
The amount of tax paid increases with income
The average rate of tax decreases with more income
The average rate of tax falls as income increases
The average rate of tax is constant as income increases
A government might use tax to
Discourage consumption of goods with positive externalities
Discourage consumption of merit goods
Discourage consumption of public goods
Discourage consumption of goods with negative externalities
A outside shift in the demand for money other things being equal should lead to
A lower interest rate but the same quantity of money
A higher interest rate but the same quantity of money
A higher quantity of money but lower interest rates
A higher quantity of money but the same interest rate
If the economy grows the governments budget position should automatically
Worsen
Improve
Stay the same
Decrease with inflation
