In the Keynesian Model of Aggregate Expenditure, Real GDP Is

question 40

Multiple Choice

In the Keynesian model of aggregate expenditure, real GDP is determined by the

• A)level of aggregate demand.
• B)price level.
• C)level of taxes.
• D)level of aggregate supply.

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Definitions:

Checkable Deposits

Funds kept in bank accounts that can readily be withdrawn by writing a check or using a debit card, making them a highly liquid form of money.

Required Reserve Ratio

The fraction of deposits that regulators require a bank to hold in reserve and not lend out, in order to ensure bank stability and liquidity.

Excess Reserves

The funds that banks hold over and above the legally mandated minimum to safeguard bank liquidity, which can also be lent out.

Actual Reserves

The funds that a bank has on hand or deposited with the central bank, available for immediate use.