The price elasticity of demand measures the responsiveness of changes in price to the quantity demanded.
Answer the following statement true (T) or false (F)
False
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In a closed economy the marginal propensity to consume is 0.60 and the marginal propensity to invest is 0.10. What is the size of the multiplier?
A) 1.33 B) 2.33 C) 3.33 D) 0.70
Consider a typical individual who owns the following financial instruments: A life insurance policy for $250,000; a certificate of deposit for $10,000; homeowner's and auto insurance policies; $50,000 in a mutual fund, and $150,000 in her pension fund at work. Which of these are instruments used primarily as stores of value and which are being used to transfer risk?
What will be an ideal response?
An economy that has interactions in trade or finance with other economies is referred to as
A) a closed economy. B) a net foreign investment economy. C) a trade-balanced economy. D) an open economy.
The simple Keynesian model
a. overstated the effect of an increase in government spending by neglecting the necessary increase in the interest rate and consequent decline in investment that accompany an increase in government spending. b. understated the effect of an increase in government spending by neglecting the necessary increase in the interest rate and consequent decline in investment that accompany an increase in government spending. c. overstated the effect of an increase in government spending by neglecting the necessary decrease in the interest rate and consequent increase in investment that accompany a decrease in government spending. d. understated the effect of an increase in government spending by neglecting the necessary decrease in the interest rate and consequent decrease in investment that accompany an increase in government spending.