The simple multiplier formula assumes the following, except that
A. the economy has excess capacity and room to expand output.
B. firms will raise prices as buyers buy more of their output.
C. business firms will increase production if demand for their output increases.
D. people will spend more if they earn additional income.
Answer: B
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Which of the following types of income are subject to FICA taxes?
A. Interest earned on checking accounts B. Business profit from the self-employed C. Inheritance D. Profits earned from dividends
People are forced to economize because of
A. competition. B. pressure to conform. C. scarcity. D. the absence of money.
An individual consumes only two goods, X and Y. Which of the following expressions represents the utility maximizing market basket?
A) MRSxy is at a maximum. B) Px/Py = money income. C) MRSxy = money income. D) MRSxy = Px/Py. E) all of the above
Given that diesel cars get much better gas mileage than the typical car, an increase in the price of gasoline would be expected to:
A. decrease the equilibrium price and quantity of diesel cars. B. increase the equilibrium price and quantity of diesel cars. C. decrease the equilibrium price and increase the equilibrium quantity of diesel cars. D. increase the equilibrium price and decrease the equilibrium quantity of diesel cars.