Increases in the marginal propensity to consume (MPC), other things constant, _____
a. increase the value of the multiplier
b. decrease the value of the multiplier
c. increase the marginal propensity to save
d. shift the aggregate expenditure curve downward
e. cause a downward movement along the aggregate expenditure curve
a
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Does it make any difference whether health-care expenditures are paid for by the consumer or by a third party (the government or an insurance company, for example)?
a. No; the quantity of health-care service demanded is not influenced by either the price of health care or who is paying for it. b. Yes; consumers of health care will have a stronger incentive to economize when they are buying the service with their own money. c. Yes; consumers of health-care services will have a stronger incentive to economize when the services are paid for by a third party. d. No; health care is an essential service, and therefore, the incentive to economize on it is unaffected by who is paying for the service.
Which of the following is true regarding the foreign holdings of U.S. dollars?
What will be an ideal response?
The demand for cars in a certain country is given by: D = 20,000 - P, where P is the price of a car. Supply by domestic car producers is: S = 5,000 + 0.5P. Suppose the economy is closed. The equilibrium price of a car is ________ and equilibrium quantity is ________.
A. $8,000; 12,000 B. $12,000; 8,000 C. $6,000; 14,000 D. $10,000; 10,000
Suppose a bank has $100 million in checking account deposits with no excess reserves and the required reserve ratio is 10 percent. If the Federal Reserve raises the required reserve ratio to 15 percent, then the bank will now have excess reserves of
A) $0. B) -$5 million. C) $5 million. D) $15 million.