Exhibit 9-8 Keynesian aggregate expenditures model
?
In Exhibit 9-8, the value of the spending multiplier is:
A. 3.
B. 4.
C. 5.
D. 2.
Answer: B
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Quick Buck and Pushy Sales produce and sell identical products and face zero marginal and average cost. Below is the market demand curve for their product. 
Suppose Quick Buck and Pushy Sales decide to collude and work together as a monopolist with each firm producing half the quantity demanded by the market at the monopoly price. If Quick Buck cheats by reducing its price to $1 while Pushy Sales continues to comply with the collusive agreement, then Quick Buck will sell ________ units and Pushy Sales will sell ________ units.
A. 3,000; 0 B. 3,000; 1,000 C. 2,000; 1,000 D. 0; 3,000
Which of the following is a monetary policy tool used by the Federal Reserve Bank?
A. Decreasing the rate at which banks can borrow money from the Federal Reserve B. Increasing the reserve requirement from 10% to 12.5% C. Buying 500 million worth of government securities, such as treasury bills D. All of the above
If the government offers to reduce your property taxes by 10 percent if you install solar heating for your home, this would be an example of
A. disincentives. B. a violation of the rational assumption. C. ceteris paribus. D. incentives.
Refer to the above table. The table gives the combinations of real disposable income and real consumption for a college student for a year. What does planned real saving equal when real disposable income equals $1200?
A. 300 B. 0 C. 1140 D. 60