If a $10 billion increase in government purchases causes a $25 billion increase in real GDP, then the expenditures multiplier is
A. unknown.
B. 2.5.
C. 10.
D. 5.
Answer: B
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What best describes the changes in steel production from 1860-1910?
a. The open-hearth process quickly became the dominant production process after it was invented. b. Technological change in steel production changed relatively slowly. c. No technological changes occurred in the steel industry. d. The production of steel stayed constant through this period, but it became much more efficient.
In long-run equilibrium, the typical perfectly competitive firm will:
a. earn zero economic profit. b. change plant size in the long run. c. change output in the short run. d. do any of these.
Assume, in a competitive market, price is initially above the equilibrium level. We predict that price will:
A. increase, quantity demanded will decrease, and quantity supplied will increase. B. decrease, quantity demanded will decrease, and quantity supplied will increase. C. decrease, quantity demanded will increase, and quantity supplied will decrease. D. decrease and quantity demanded and quantity supplied will both decrease.
What determines the revenue flows received by businesses?
A) an agency of the Federal government B) their ownership of factors of production, how much they sell in the factor markets, and the prices received when sold C) what they pay the factors of production they employ D) what they choose to produce, how much is sold, and the price received when sold E) financial institutions such as banks