Is there a multiplier effect from increases and decreases in net exports?
What will be an ideal response?
Yes, there is a multiplier effect from changes in net exports. Changes in the net export schedule cause shifts in the aggregate expenditure curve.
There is a multiplier effect due to the marginal propensity to consume. An increase in exports is an increase in spending that gets multiplied down the line as spending is recycled and consumption increased. This causes the multiplied effect on GDP.
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A monopsony hires labor up to the point where the marginal revenue product of labor equals the wage rate
a. True b. False Indicate whether the statement is true or false
Consider an island where people use sand dollars (shells) as currency. For simplicity, assume that people consume only one good: fish. Currently, there are 400 sand dollars in circulation and there are 200 fish purchased each year. Based on this information, what is the price of fish?Now, suppose that a change in climate leads to new sand dollars washing ashore, leaving a total of 500 sand dollars. If there are still 200 fish purchased each year, what is the new price of fish? In order to prevent inflation, what would have to happen to the amount of fish purchased each year?
What will be an ideal response?
Five players are given $10 each and asked to contribute any portion of it to a group account. They are also told that the total collection will be doubled and distributed equally among each of them
In this case, the players are likely to contribute ________. A) $5 each B) $10 each C) $1 each D) nothing
When interest rates in the U.S. decline, we can expect net capital outflow to:
A. increase. B. decrease. C. be unaffected. D. be zero.