When the government develops policies to stabilize the economy
A) only expansionary fiscal policy is impacted by the multiplier effect.
B) only contractionary fiscal policy is impacted by the multiplier effect.
C) these policies are unaffected by the multiplier effect.
D) it needs to consider the multiplier effect for all fiscal policies.
D
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GDP measures the total income a society generates
Indicate whether the statement is true or false
For a typical firm, fixed costs increase in direct proportion to the increases in output
a. True b. False Indicate whether the statement is true or false
Which of the following statements most likely lies within the realm of microeconomics?
A. Unemployment rises during a recession and falls during an expansion. B. An increase in government spending will increase the aggregate demand for goods and services in the economy. C. A rapid acceleration of the supply of money may create inflation. D. An increase in labor costs will increase the additional cost of producing another bus.
Suppose there are 1,825 taxi medallions in Boston, each valued at about $250,000. Assume the price elasticity of demand for taxi rides is 1; the current price for a taxi ride is $4.75 per mile, and the cost of the ride is $3.00 per mile. How much would a person be willing to pay for a new medallion if the city increased the number of medallions to 2,000? (Hint: The price of the medallions is equal to the total profit from the average total number of miles each medallion will accumulate.)
A. $250,000 B. $160,000 C. $337,000 D. $185,000