Suppose the MPC is .6 and consumption increases by $6 billion. Consequently, total income through the multiplier effect will:
a. Increase by $12 billion
b. Decrease by $15 billion
c. Increase by $15 billion
d. Increase by $10 billion
Answer: c. Increase by $15 billion
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Beginning from a long run equilibrium in a competitive industry, if there is a substantial, permanent increase in demand for industry output:
a. firms will enter the industry, the quantity produced will rise, and prices will end up lower than their initial long run equilibrium level. b. firms will enter the industry, the quantity produced will rise, and prices will end up higher than their initial long run equilibrium level. c. firms will enter the industry, the quantity produced will rise, and prices will end up at the same level as their initial long run equilibrium level. d. firms will enter the industry, the quantity produced will rise, and but without more information, we cannot know if prices will end up higher than their initial long run equilibrium level.
The signaling theory of education maintains that workers who complete specific levels of education signal their high productivity to potential employers
a. True b. False Indicate whether the statement is true or false
The relatively low inflation experienced in the United States in the 1990s is attributable to
a. slow growth of U.S. productivity during the 1990s. b. slow growth of the quantity of money in the U.S. in the 1990s. c. low levels of government spending in the U.S. in the 1980s and 1990s. d. the eight-year presidency of William Jefferson Clinton during the 1990s.
An index based on the 500 largest firms traded in the three biggest stock markets is the
A. NASDAQ. B. Standard and Poor's 500 index. C. Blue Chip index. D. Dow Jones Industrial Average.