The slope of the consumption function is the
A. APC.
B. MPS.
C. MPC.
D. APS.
Answer: C
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Which of the following does not usually occur when there is an increase in government spending?
a. Government purchases crowd out private-sector spending. b. Total spending decreases. c. The interest rate increases. d. Investment spending declines. e. Household saving increases.
Which statement is true?
A. GDP can never be greater than NDP. B. NDP can never be greater than GDP. C. GDP and NDP are always equal. D. None of the statements are true.
The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
Which of the following events is likely to generate a demand for U.S. dollars in the foreign exchange market?
A) A Saudi Arabian citizen buys a condominium in New York. B) An American student will begin her first year of college at Oxford, England. C) Wal-Mart imports 5,000 bicycles from China to sell in its stores. D) The Illinois Chamber of Commerce will finance and lead a trade mission to India.