Assume that taxes depend on income. The MPC is 0.5 and t is 0.5. The government spending multiplier is
A. 1.33.
B. 2.
C. 2.5.
D. 4.
Answer: A
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In the above figure, the monopsonist will employ
A) L2 at a wage of W2. B) L2 at a wage of W3. C) L1 at a wage of W1. D) L1 at a wage of W3.
The definition of M2 includes:
A. cash and checking account balances. B. hard money and savings account balances. C. cash, checking account, and savings account balances. D. cash, checking accounts, savings accounts, and other financial instruments where money is locked away for a specified period of time.
Market economies are based on private enterprise, which means
a. there is no private property. b. private companies control the government. c. economic decision-making happens through markets. d. all property is private.
Holding all else constant, a decrease in the real interest rate on Mexican assets will ________ the supply of dollars in the foreign exchange market and ________ the equilibrium Mexican peso/U.S. dollar exchange rate.
A. increase; decrease B. decrease; increase C. increase; increase D. decrease; decrease