If the spending multiplier is equal to 4, then a $25 initial increase in investment spending will lead to a:
a. $25 increase in real GDP.
b. $1 decrease in real GDP.
c. $1 increase in real GDP.
d. $100 decrease in real GDP.
e. $100 increase in real GDP.
e
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A voluntary export restraint is an agreement negotiated between two countries that places a numerical limit on the quantity of a good that can be imported by one country from the other country
Indicate whether the statement is true or false
Despite the long-term mutual gains from international trade, in the short run
A. particular firms, industries, and groups of workers can be harmed substantially by imports. B. international trade is usually inflationary. C. countries must learn to be self-sufficient. D. most countries realize mutual net losses.
The substitution effect reflects how a consumer will react to a different:
A. level of nominal income. B. marginal rate of substitution. C. level of real income. D. market rate of substitution.
A consumer has been buying 2 magazines and 1 book each month. The price of magazines then decreases, which directly causes the marginal utility per dollar spent on
A. magazines to increase, thereby inducing the consumer to purchase more magazines and fewer books. B. books to increase, thereby inducing the consumer to purchase fewer magazines and more books. C. magazines to increase, thereby inducing the consumer to purchase fewer magazines and more books. D. books to decrease, thereby inducing the consumer to purchase fewer magazines and more books.