Refer to Figure 11.4. Which diagram illustrates the effect of an increase in the marginal propensity to consume?
A) A B) B C) C D) D
A
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According to new growth theory
A) physical capital is nonexcludable. B) knowledge capital is subject to increasing returns. C) knowledge capital is rival and excludable. D) knowledge capital is excludable.
Assume that a security has equally possible outcomes of yielding 8 percent and 4 percent. The standard deviation of the probability distribution of returns for this security is
A) 6 percent. B) 4 percent. C) 3 percent. D) 2 percent.
Unpredictable inflation can cause businesses to:
A. have a hard time planning future production. B. cease production until they know how to adjust for inflation. C. restrict output and stockpile inventory. D. increase production due to expecting future price level changes.
When Paul Volcker became Federal Reserve chairman in 1979
A. the rate of inflation was relatively low, and he managed to raise it to 12 percent. B. the rate of inflation was 12 percent, and he managed to reduce it, but doing so caused a recession. C. the rate of inflation was 12 percent, and he was not able to bring it down during his time as chairman. D. the rate of inflation was already low and stable, but his policies made it lower and more stable.