The multiplier effect
a. tells us nothing about how increases in investment spending affect GDP
b. tells us that a change in investment spending changes equilibrium GDP by more than the change in investment
c. works only for increases in investment
d. is relevant only in situations where the marginal propensity to consume cannot be determined
e. is relevant only in situations in which the MPC is between 0.5 and 0.7
B
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If a price ceiling is set above the equilibrium price, then
A) there will be a surplus of the good. B) there will be a shortage of the good. C) there will be neither a shortage nor a surplus of the good. D) the price ceiling will generate revenue for the government. E) the price ceiling affects suppliers but not demanders.
If Country A's central bank wanted to increase the value of its currency, its reserves account in the balance of payments would:
a. Become more negative. b. Become more positive. c. Not change. d. Change only if there were no offsetting changes in the net errors and omissions account.
For a monopoly producing any output level greater than one, the average revenue curve:
A. lies above the demand curve. B. lies below the demand curve. C. lies above the marginal revenue curve. D. is the same as the marginal revenue curve.
Which of the following does NOT help explain why pay should rise with age?
A. Many jobs require a learning curve that is often years long. B. Workers tend to build firm-specific knowledge over time. C. Reasoning abilities, mental speed, and memory improve as people age. D. Experience improves performance.