If the MPC is 0.5, then the spending multiplier must be:
A. 2.25.
B. 2.5.
C. 2.
D. 1.2.
Answer: C
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The terms of trade (TOT) is defined as
A) (index of export prices)/(index of import prices). B) (home-country currency)/(foreign-country currency). C) . D) E) having a competitive advantage over other nations.
On the consumption contract curve
A. supply equals demand of both goods. B. there will be no further voluntary exchange. C. all allocations are Pareto optimal. D. All of these are true.
According to the quantity theory of money, if M's growth is lower than Q's, then:
A. V falls. B. V rises. C. P rises. D. P falls.
A distinguishing feature of a public good is that it:
A. is not possible to exclude people who don't pay for the public good. B. is possible to exclude people who pay for the public good. C. may have external costs. D. is provided by the government.