Mathematically, the value of the spending multiplier in terms of the marginal propensity to consume (MPC) is given by the formula:
a. MPC ? 1.
b. (MPC ?1) / MPC.
c. 1 / MPC.
d. 1 / (1 ? MPC).
d
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Which of the following is an appropriate discretionary fiscal policy if equilibrium real GDP falls below potential real GDP?
A) an increase in the supply of money B) an increase in individual income taxes C) a decrease in transfer payments D) an increase in government purchases
When would a rise in labor's marginal productivity lead to a leftward shift in workers' labor supply curve?
a. When workers are employed by a monopsony. b. When workers earn more nonlabor income from their capital. c. When workers engage in intertemporal substitution. d. When workers reduce their investment in human capital.
From 1990 to 2010, the public sector share of total output
A. Trended downward to 2000 and then upward to 2010. B. Trended upward through 2010. C. Trended downward to 2010. D. Trended upward to 2000 and then downward to 2010.