Since the value of the multiplier is always at least 1, which of the following is correct?
a. The size of the vertical shift in the aggregate expenditure line is always equal to the change in GDP
b. The size of the vertical shift in the aggregate expenditure line is always less than the change in GDP
c. The size of the vertical shift in the aggregate expenditure line is always greater than the change in GDP
d. The size of the vertical shift in the aggregate expenditure line is always equal to or smaller than the change in GDP
e. The MPC is always bigger than 1
D
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Which of the following would be least likely to affect the supply of automobiles?
a. higher prices for steel and other resources used in producing automobiles b. a successful physical fitness plan encouraging Americans to walk rather than drive to their destinations c. a technological improvement reducing the production costs of automobiles d. increased wages for members of the United Auto Workers union
The people most likely to pay little personal income tax to the U.S. government are
A. the middle class. B. renters. C. the very poor. D. earners of wages (as opposed to salaries).
The balance of payments constraint refers to the limits on:
A. exchange rate policy imposed by flexible exchange rates. B. currency convertibility observed in most developing countries. C. domestic macroeconomic policy, arising from a shortage of international reserves. D. macroeconomic policy resulting from IMF conditionality.
Which of the following is most likely to result in unemployment?
A. Aggregate demand grows more rapidly than aggregate supply. B. Aggregate demand and aggregate supply grow at the same rate. C. Aggregate supply grows more rapidly than aggregate demand. D. Neither aggregate demand nor aggregate supply grows at all.