If the marginal propensity to consume is 4/5, the multiplier is:
a. 20
b. 5.
c. 1.
d. 1/5.
b
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Suppose the government breaks up a single-price monopoly and turns it into a perfectly competitive industry
What will happen to price and the quantity produced? What will happen to the monopoly's economic profit and the deadweight loss associated with the monopoly?
Assume that an inflationary gap must be closed by reducing aggregate expenditures. If consumers refuse to cut spending on consumption and producers won't cut demand for investment goods, the President:
a. can do nothing. b. must build more roads. c. must borrow from Wall Street. d. must increase Social Security expenditures. e. must cut government spending.
In a hostile takeover,
a. existing management of the target company opposes the takeover b. management of the buying company opposes the takeover c. the government opposes the takeover d. stockholders of the target company oppose the takeover e. bondholders of the target company oppose the takeover
Which of the following would be most appropriate if the Federal Reserve wanted to increase the money supply in order to stimulate the economy?
A. Buy U.S. government securities. B. Force the Treasury to reduce the national debt. C. Raise the discount rate. D. Increase the reserve requirements.