If the multiplier is 4, a decrease in spending equal to $80 billion will be accompanied by a decrease in GDP of
a. $480 billion.
b. $320 billion.
c. $240 billion.
d. $84 billion.
e. $48 billion.
b
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Keynes thought that expectations are
a. a function of current income. b. predictable and stable. c. an important determinant of consumption. d. unpredictable and influences planned investment.
What factors constitute the primary determinants of income?
What will be an ideal response?
In 1973, the oil embargo sparked a wage-price spiral due to higher energy costs. In 2004, with a similar spike in oil prices, there was not a corresponding wage-price spiral because
A. the jump in prices did not last very long. B. the economy avoids unanticipated inflation. C. of alternative energy sources. D. of heavy government regulation.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, an increase in unemployment may be represented by the movement from
A. B to A. B. A to C. C. C to D. D. B to D.