As the MPS increases, the multiplier will
A. decrease.
B. remain constant.
C. increase.
D. either increase or decrease depending on the size of the change in investment.
Answer: A
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Firms often seek to borrow money to expand their capital stock, and the price they pay for that money is the interest rate. What happens to the quantity of money supplied if the interest rate increases?
A. It increases. B. It decreases. C. It does not change. D. It depends entirely on the interest rate.
In the open-economy ISLM model, the goods market equilibrium condition is
A) output = consumption + investment + government spending. B) output = consumption + investment + government spending - tax. C) output = consumption + investment + government spending + net export. D) output = potential output.
If real GDP grows at a constant rate of 2 percent per year, using the "rule of 72" it will take approximately ___ years for real GDP to double
a. 15 b. 20 c. 10 d. 36
Which of the following is a significant difference in the behavior of the dictator/proposer between the dictator game and the ultimatum game?
A. The dictator/proposer tends to be more generous in the ultimatum game. B. The dictator/proposer tends to be more generous in the dictator game. C. There is no systematic difference in the generosity of the dictator/proposer between the two games. D. Dictators/proposers demonstrate more emotion when playing the dictator game.