Assuming short-run sticky prices, the same monetary policy result may be achieved by targeting the money supply or the nominal rate of interest whenever:
a. the demand for money is stable.
b. interest income is not taxable.
c. changes in the supply of money are small and predictable.
d. real income is constant.
Ans: a. the demand for money is stable.
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If the MPC = 0.9 and a household obtains $20,000 more dollars then how much would the household spend of the additional $20,000?
A. $20,000 B. $2,500 C. $17,500 D. $18,000
GDP, according to the income method, is the sum of:
a. wages, rent, interest, and profits. b. consumption, gross investment, depreciation, and net exports. c. depreciation, net factor income from abroad, and indirect business taxes. d. gross investment, wages, profits, rent, and indirect business taxes. e. consumption, profits, interest, rent, and net exports.
To represent a worker, a union must
a. simply receive the worker's permission b. receive a unanimous approval in an election c. receive a majority of the workers' votes in an election d. receive at least two-thirds of the workers' votes in an election e. receive the permission of the employer
President Clinton, at the beginning of his administration, increased personal income taxes on individuals with relatively high incomes. How will this change the consumption schedule?
a. It will shift and become steeper. b. It will shift and become flatter. c. It will shift in a parallel manner. d. It will remain fixed as the economy moves along the schedule.