If the MPC = 1, the spending multiplier is:
a. infinite.
b. zero.
c. 10.
d. 100.
e. 1.
a
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Which of the following is true about the LM curve?
a. Along the LM curve, actual expenditure is equal to planned expenditure. b. The LM curve slopes upward and is consistent with a given level of income. c. The LM cuve slopes upward for a given level of the money supply. d. The LM curve is horizontal in the classical model. e. none of the above.
If the quantity demanded of good x rises by 3% and, in response, your income goes up by 2%, the income elasticity of demand would be:
a. 1.5 b. 6 c. 3 d. .20
Each of the following was considered a proponent of supply-side economics EXCEPT
A. Arthur Laffer. B. Ronald Reagan. C. Congressman Jack Kemp. D. Milton Friedman.
If two individuals work equally hard, their wages will be equal.
Indicate whether the statement is true or false.