The amount by which imports increase when income goes up by one dollar is called
A. the marginal propensity to import.
B. the marginal propensity to consume.
C. the spending multiplier.
D. the money multiplier.
Answer: A
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___________ is a winning strategy in a game of bargaining.
A. First-mover advantage B. Patience C. Cooperation D. Self-interested behavior
An economy in a downward phase of the business cycle will, according to internal cycle theory,
a. continue on its downward path unless the government intervenes b. continue on its downward path unless technological innovation occurs c. continue on its downward path unless consumption spending increases d. eventually recover because capital stock wears out and needs replacement e. eventually recover because saving rates fall
Tax as a wedge
What will be an ideal response?
A firm that generates pollution is illustrated in Figure 9.7. If the government would like to induce this firm to abate, or reduce, its pollution by A1 tons, it will impose a pollution tax equal to:
A. P1. B. P1 minus P3. C. P2. D. P2 minus P3.