Recently, the level of GDP has declined by $60 billion in an economy where the marginal propensity to consume is 0.75. Aggregate expenditures must have fallen by:
A. $45 billion
B. $30 billion
C. $15 billion
D. $60 billion
C. $15 billion
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Which of the following is the most essential prerequisite for successful conduct of the "game" of urban traffic?
A) An advance plan to coordinate the moves of participants B) Drivers who care as much about other people's interests as their own C) Extensive information on other drivers' destinations and objectives D) General consensus on and following of traffic rules
Which of the following statements is true of the short run?
A) Identical firms can enjoy positive economic profits. B) Identical firms face a downward-sloping supply curve. C) Non-identical firms face a downward-sloping supply curve. D) Non-identical firms cannot enjoy positive economic profits.
Suppose you were to believe that "money illusion" exists that is as prices and incomes both rise proportionally, people buy more. Which of the following characteristics of demand does that cause you to doubt?
a. demand functions are downward sloping b. demand has a positive vertical intercept c. demand has a positive horizontal intercept. d. demand functions are homogeneous of degree zero.
If a bank borrows $1,000 from the Fed and lends it out, the bank sets in motion a process that will result in an expansion of the money supply by a multiple of that $1,000
a. True b. False Indicate whether the statement is true or false