All of the following are true statements about the multiplier except
A) The formula for the multiplier overstates the real world multiplier when we take into account the impact of changes in GDP on imports, inflation and the interest rate.
B) The larger the MPC, the larger the multiplier.
C) The multiplier is the ratio of the change in real GDP to the change in autonomous expenditure.
D) The multiplier makes the economy less sensitive to changes in autonomous expenditure.
D) The multiplier makes the economy less sensitive to changes in autonomous expenditure.
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What is one major hurdle monopolies face to engage in first-degree price discrimination?
A. Finding everyone's willingness to pay is costly and difficult. B. Overcoming legal conflicts to charge each person differently is costly. C. Market research is costly and time-consuming. D. Not every person has a maximum willingness to pay for a good.
Last year, Bentley bought a bond for $1,000 that promises to pay $115 a year. This year, a person who buys a bond for $1,000 receives $125 a year. If Bentley were to sell his (old) bond, its price would be approximately
A) $920. B) $1,125. C) $1,087. D) $1,350.
The goal of expansionary fiscal policy with respect to output is to:
A. increase spending and aggregate demand to get back to an output level the government is comfortable with. B. decrease government spending in an attempt to get the private economy back on track. C. increase spending and shift aggregate demand to the left in an effort to reach full employment output. D. increase spending and shift aggregate demand to the right in an effort to reach full employment output.
The demand for cat food decreases while the supply increases. The equilibrium price of cat food ________, and the equilibrium quantity ________
A) does not change; increases B) rises; decreases C) falls; perhaps changes but we can't say if it increases, decreases, or stays the same D) rises; perhaps changes but we can't say if it increases, decreases, or stays the same E) falls; increases