PSYC 102 Lecture Notes - Gross Domestic Product, Potential Output, Aggregate Demand

• School: UBC
• Department: Psychology
• Course: PSYC 102
• Professor: Michael Souza

Document Summary

This exam has 15 multiple choice questions in part a and 5 short questions in part b. Since output in the long run is determined by y*, the only role of: __d____ the ad curve is to determine the price level. , government purchases of , and net tax revenue of . What is the level of national saving: , , , , , doug is saving money in order to purchase a new snowboard next winter. Assume that bank north is operating with no excess reserves. They do this by trying to ________, which causes an excess. Briefly explain how and why banks create new money during the deposit multiplier process. When banks get a new deposit, this leaves them with excess reserves. The desire to make profits leads banks to lend out excess reserves, creating a matching deposit, which is new money.