If the marginal propensity to save is equal to 0.5 in the simple Keynesian model, then a 10-unit increase in government spending will cause output to rise by
a. 5 units.
b. 10 units.
c. 20 units.
d. 25 units.
e. 40 units.
C
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In the European Monetary Union, the supply of euros
A) is managed by the individual central banks of the member countries. B) is managed by the European Central Bank. C) is determined by market forces. D) automatically varied in response to short-run fluctuations in the exchange rates of the member nations.
Which statement most accurately describes the distribution of income among US families?
a. In 2005, as in most of American history, poor people work on average many more hours than do high-income people. b. The median real family income has remained about the same since 1970. c. One of the most significant determinants of income inequality in the US has been the increase in demand for highly trained labor. d. Earnings of married-couple families have grown more slowly than earnings of both male and female households with no spouse.
Cooperation:
A. is a mixed strategy. B. fails when the temptation to cheat is sufficiently strong. C. eliminates the temptation to cheat. D. is always a Nash equilibrium.
Under market capitalism, resources are allocated primarily through
a. government decree b. voter consensus c. tradition d. lottery e. prices