Assume a closed economy with fixed taxes and the marginal propensity to consume is equal to 0.9. What is the government spending multiplier?
A) 10 B) 9 C) 5 D) 1
A
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From a macroeconomic perspective, the problem of low household saving has probably been overstated because:
A. household saving represents a smaller share of national saving than does public saving. B. it is national saving, not household saving, that allows an economy to accumulate new capital. C. household saving is not related at all to an economy's ability to accumulate new capital. D. household saving has been increasing steadily over the last three decades.
Which of the following is true of a small open economy, but not of a large open economy?
A) Net exports are unlikely to be close to zero. B) The domestic real interest rate is equal to the world real interest rate. C) Changes in desired investment result in changes in the trade balance. D) Changes in desired investment result in changes in actual investment. E) none of the above
At the profit-maximizing output, price is greater than marginal cost
a. for a monopolistically competitive firm only in the short run b. for a monopolistically competitive firm only in the long run c. for a monopolistically competitive firm in both the short run and the long run d. for a perfectly competitive firm only in the short run e. for a perfectly competitive firm only in the long run
Trade between countries is based on
A) absolute advantage only. B) monopoly power. C) comparative advantage. D) none of these choices.