For this question, assume that individuals do not hold currency (i.e., c = 0). The money multiplier is equal to
A) 1.
B) 1/(1 - c).
C) ?.
D) 1/(1- ?).
E) none of the above
E
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The cross elasticity of demand for butter and margarine is likely to be
A) positive because they are substitutes. B) positive because they are complements. C) negative because they are substitutes. D) negative because they are complements. E) positive because they are normal goods.
At the point where the disposable income line intersects the consumption function, saving:
a. equals consumption. b. equals disposable income. c. is less than zero. d. is equal to zero.
International per capita GDP comparisons are misleading when countries involved differ greatly in
A. the type of economic system each country uses to solve its economic problem. B. the freedom of their election processes. C. the percentage of economic activity that is transacted in organized markets. D. the quantity of human and natural resources they possess.
The expected benefit of investment equals:
A. the real interest rate. B. the value of the marginal product of capital. C. private saving. D. the price of the capital good.