If the multiplier = 2.5, the MPC would be:
A. 0.25.
B. 0.4.
C. 0.6.
D. 0.75.
Answer: C
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Limited commitment means
A) one cannot credibly promise something. B) one saves only part of what is optimal. C) only some households are allowed to save. D) there is rationing on the credit market.
If the purpose of a tax is to raise revenue, it would be best for government to place the tax on which of the following goods?
a. a non-essential good, such as holiday travel b. a good whose demand curve is highly elastic c. a good that has several close substitutes d. a good whose demand curve is highly inelastic e. a good whose demand curve is unit elastic
In the fifteenth and sixteenth centuries, most towns prohibited individuals from accumulating stocks of grain. Since such individuals sold the grain and profited greatly during food shortages, they were considered to be exploiting people in need. The result of this prohibition was
a. wilder fluctuation in the price of grain. b. more grain shortages. c. losses to farmers in a good crop year. d. All of the above are correct.
Explain the difference between a change in the quantity demanded and a shift in the demand curve
What will be an ideal response?