U.S. Government Bonds Held by Commercial Banks Are

question 56

Multiple Choice

U.S. government bonds held by commercial banks are:

• A)​government assets and commercial bank assets.
• B)​government assets and commercial bank liabilities.
• C)​government liabilities and commercial bank assets.
• D)​government liabilities and commercial bank liabilities.

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Definitions:

MPC

Marginal Propensity to Consume, the fraction of additional income that is spent on consumption.

Multiplier

In economics, it refers to the factor by which gains in total output are greater than the change in spending that caused it, often associated with fiscal and monetary policy impacts.

MPC

The marginal propensity to consume, which represents the proportion of an increase in income that gets spent on consumption.

Government Spending

Expenditures by government entities on goods and services, including infrastructure, public services, and social welfare programs.