The multiplier effect suggests that:
A. a ripple effect occurs from one person's initial spending.
B. government spending $1 will create more than a $1 increase in GDP.
C. a tax cut will increase GDP by more than the amount of the initial tax cut.
D. All of these are true.
D. All of these are true.
You might also like to view...
If firms and workers have adaptive expectations, what impact will contractionary monetary policy have on inflation, unemployment, and the Phillips curve?
What will be an ideal response?
The fact that the supply curve for a given firm's bond is vertical reflects the fact that
a. at any given point in time there are a fixed number of those bonds in existence. b. firms adjust the number of bonds they issue on a daily basis c. investors do not adjust their portfolios when interest rates change d. government limits the amount of bonds a company can issue
_________________ —a term describing a good in which the quantity demanded rises as income rises, and in which quantity demanded falls as income falls.
a. Complement good b. Inferior good c. Normal good d. Superior good
Which statement is true?
A. A firm will always produce at an output corresponding to the minimum point of its ATC curve. B. Efficiency and profit maximization always occur at the same output. C. A firm will operate in the short run if total revenue is greater than variable costs. D. The rule for maximizing profits is different than the rule for minimizing losses.