Each additional round of the multiplier process will tend to be larger:
a. the smaller the MPC
b. the greater the rate of income taxation.
c. the less people save from increases in their incomes.
d. the larger the fraction of each dollar of domestic income spent on imported goods.
e. in each of the above cases.
c
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If the Fed conducts an open market purchase of bonds, which of the following will happen?
a. The interest rate will decrease, the aggregate expenditure line will shift upward, and the aggregate demand curve will shift leftward. b. The interest rate will increase, the aggregate expenditure line will shift upward, and the aggregate demand curve will shift rightward. c. The interest rate will decrease, the aggregate expenditure line will shift upward, and the aggregate demand curve will shift rightward. d. The interest rate will decrease, the aggregate expenditure line will shift downward, and the aggregate demand curve will shift rightward. e. The interest rate will increase, the aggregate expenditure line will shift downward, and the aggregate demand curve will shift leftward.
What role does ideology play in the debate on stabilization?
a. A large role, because there are conservative and liberal economists. b. A primary role, because there are no economic aspects to the debate at all. c. A minor role, because economists are fairly uniform in their political views. d. No role at all, because this is purely a technical question.
Which of the following is NOT a motive for holding money?
a) the transaction motive b) the speculative motive c) the asset motive d) all of the above are motives for holding money
One of the assumptions underlying the production possibilities curve is that
A. there is at least one factor of production that is employed inefficiently. B. the quantity of the resources available for the production of economic goods is fixed over a given time period. C. at least one of the factors of production is a free good. D. some of the factors of production are not being used.