In normal times, the actual money multiplier in the United States is:
A. sometimes negative during a recession.
B. approximately equal to 10.
C. approximately equal to 3.
D. 0 in the long run and 3 in the short run.
Ans: C. approximately equal to 3.
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A principal-agent problem occurs when
a. people are "fooled" by high absolute wages offered by employers. b. insurance increases people's willingness to take risks. c. an employer cannot fully monitor the employee's work. d. a highly productive worker is unable to earn any rent.
Which of the following is true of a perfectly competitive firm?
a. The firm is a price maker. b. If the firm wishes to maximize profits it will produce an output level in which total revenue equals total cost. c. The firm will not earn an economic profit in the long run. d. The firm's short-run supply curve is its MC curve below its AVC curve.
In the Keynesian model, the 45-degree line consists of the points where
a. planned consumption is equal to planned saving. b. total output is equal to aggregate expenditure. c. total consumption is equal to total expenditure. d. total saving equals total investment.
In Macroland, autonomous consumption equals 100, the marginal propensity to consume equals 0.75, net taxes are fixed at 40, planned investment is fixed at 50, government purchases are fixed at 150, and net exports are fixed at 20. Autonomous expenditure equals:
A. 290 + 0.75Y. B. 290. C. 320. D. 320 + 0.25Y.