What does inflation do to the value of the oversimplified multiplier?
A. Inflation increases the value of the multiplier above the value of the oversimplified formula.
B. Inflation does not change the value of the multiplier.
C. Inflation decreases the value of the multiplier below the value of the oversimplified formula.
D. Inflation increases the value of the multiplier unless the level of unemployment also rises.
Answer: C
You might also like to view...
The functions of money are to serve as a
A. resource allocator, a method for accounting, and a means of income distribution. B. determinant of consumption, investment, and government spending. C. unit of account, a store of value, and a medium of exchange. D. factor of production, exchange, and aggregate supply.
Input-output analysis is rarely used because
a. it requires tremendously complex calculations. b. it requires large amounts of data. c. market economies can instead rely on the price mechanism to organize production. d. All of the above are correct.
If saving is greater than domestic investment, then
a. there is a trade deficit and Y > C + I + G. b. there is a trade deficit and Y < C + I + G. c. there is a trade surplus and Y > C + I + G. d. there is a trade surplus and Y < C + I + G.
A linear demand curve
A. will have an ever rising total revenue function. B. becomes less elastic as price falls. C. always has a constant elasticity. D. can have constant elasticity if its slope is more than one.