List the reasons why the actual multiplier, which is estimated to be less than 2 for the U.S. economy, is much less than what the oversimplified formula suggests.
What will be an ideal response?
The oversimplified formula ignores1. variable imports, which reduce the size of the multiplier.2. price-level changes, which reduce the size of the multiplier.3. the income tax, which reduces the size of the multiplier.4. the rising interest rates that accompany any autonomous increase in spending, which also reduce the size of the multiplier.
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The FOMC is the
A) name of the meeting the Fed has with Congress twice a year. B) report that summarizes the economy across Fed districts. C) report the Fed gives to Congress twice a year. D) group within the Fed that makes monetary policy. E) interest rate the Fed most directly influences.
For a nondiscriminating monopolist, which of the following statements is true?
a. Unlike a firm in perfect competition, a monopolist produces where MR > MC. b. The monopolist's marginal revenue curve is the same as its demand curve. c. The monopolist will always produce in the inelastic range of its demand curve. d. The monopolist does not have a supply curve. e. The monopolist produces where MR < MC.
If New York City imposed a 50 cent tax on soft-drink beverages that contain sugar or high-fructose corn syrup, it would
a. be an excise tax. b. be an income tax. c. reduce tax revenue. d. cause the supply of corn to rise.
When aggregate expenditures fall below the full-employment level of output, which of the following types of unemployment is most likely to increase?
A. Seasonal. B. Structural. C. Cyclical. D. Frictional.