Suppose the consumption equation is represented by the following: C = 250 + .75YD. The multiplier in this economy is
A) .25.
B) .75.
C) 1.
D) 4.
E) 5.
D
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When the gross domestic product is growing, it is called inflation.
a. true b. false
As part of the "wealth channel of monetary policy," a lower money supply __________ interest rates and thus __________ bond prices
A) raises; raises B) raises; lowers C) lowers; raises D) lowers; lowers
We know the following about a tie manufacturer: tie sales $1,300, cotton purchases $750, wages $400, interest on business loans $100, and profits $50. What is the contribution to GDP of this producer using the income approach?
A) $550 B) $500 C) $450 D) $400
Gains from trade are the:
A. increase in welfare in both countries that results from specialization and trade. B. transfer of surplus by the receiving country that results from trade. C. deadweight loss by the losing country that results from trade. D. increased skills and human capital that results from specialization and trade.