Answer the following statements true (T) or false (F)
1)The multiplier will be larger, the steeper is the saving schedule.
2) If a $100 billion increase in consumption spending creates $100 billion of new income in the first round of the multiplier process and $75 billion in the second round, the multiplier in the economy is 4.
3) The lower the marginal propensity to consume, the larger is the multiplier.
4) If households do not spend any extra income they receive but instead save the entire extra amount, then the multiplier will be zero.
1) F
2) T
3) F
4) F
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If the number of people in the labor force ________, then ________
A) increases; the labor force participation rate increases B) increases; the unemployment rate definitely increases C) decreases; the unemployment rate definitely decreases D) decreases; the labor force participation rate increases E) decreases, the unemployment rate does not change
________ of unemployment during ________ make it easier for workers to ________ wages
A) Low levels; an expansion; negotiate higher B) High levels; an expansion; accept lower C) High levels; a recession; negotiate higher D) Low levels; a recession; accept lower
A monopoly firm always devotes some of its profits to research.
Answer the following statement true (T) or false (F)
Answer the following statement(s) true (T) or false (F)
1. No one benefits when interest rates rise, because everyone's current consumption will be lowered. 2. Future productivity increases will be reflected in higher interest rates today. 3. Increases in interest rates lead to overall net gains. 4. A higher demand for capital implies a lower supply of current consumption. 5. A perpetuity is a bond with an established maturity date.