An increase in the marginal propensity to consume (MPC) leads to an increase in the spending multiplier
a. True
b. False
Indicate whether the statement is true or false
True
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When GM advertises its cars, the company is trying to cause a
A. rightward shift in the supply. B. rightward shift in the demand. C. leftward shift in the supply. D. leftward shift in the demand.
What role can the government play in correcting problems of imperfect information?
What will be an ideal response?
Refer to Figure 26-9. In the figure above suppose the economy is initially at point A. The movement of the economy to point B as shown in the graph illustrates the effect of which of the following policy actions by the Federal Reserve?
A) an increase in the required reserve ratio B) an open market sale of Treasury bills C) an open market purchase of Treasury bills D) a decrease in income taxes
In recent years, the number of farms has fallen while the average farm size has increased. What concept may explain this phenomenon?
a. diminishing marginal returns b. declining productivity c. diseconomies of scale d. economies of scale e. good weather in midwestern states