When an economy's simple spending multiplier is 2.5, then its marginal propensity to consume is 0.4
a. True
b. False
Indicate whether the statement is true or false
False
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Refer to Table 2-9. What is Haley's opportunity cost of making a necklace?
A) 2 necklaces B) 3 bracelets C) 3/4 of a bracelet D) 1 1/3 necklaces
Because the quantity theory of money tells us how much money is held for a given amount of aggregate income, it is also a theory of
A) interest-rate determination. B) the demand for money. C) exchange-rate determination. D) the demand for assets.
If a bond dealer sells a government bond to the Fed for $100,000, and the reserve ratio is 10 percent, then the bank that receives a $100,000 deposit from the dealer can expand its loans by ________,
and the money supply can increase by as much as ________. A) $80,000; $800,000 B) $10,000; $100,000 C) $90,000; $1,000,000 D) $90,000; $900,000
The process of accumulating capital is called:
a. capitalization. b. loanable funds. c. investment. d. debt management.