If a $50 increase in government spending causes a $250 increase in national income, the value of the income multiplier is
a. 5
b. 0.20
c. 0.80
d. 3
e. 10
A
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The income-expenditure model focuses on changes in
A) price. B) operational lags. C) output levels. D) import restrictions.
Which of the following best describes the response of output as time passes to an increase in the saving rate?
a. The growth rate of output does not change. b. The growth rate of output increases and gets even larger as time passes. c. The growth rate of output increases and does not change as time passes. d. The growth rate of output increases, but diminishes to its former level as time passes.
The difference between mercantilism and feudalism is that under mercantilism:
A. the invisible hand played a more important role than the government. B. nation-states ruled by kings who coordinated the economic activity emerged. C. economic rather than social and political forces made the central economic decisions. D. merchants played a more important political role than kings.
A monopolist wishing to increase its profit has just discovered that lowering its price and selling more output yielded the desired result. Profit increased. Based on this, we can conclude that the cost of the additional production is
A) greater than the revenue from the additional production. B) precisely equal to the revenue from the additional production. C) less than the revenue from the additional production. D) there is no way to answer this because you have not given us the marginal revenue and marginal cost data.