The basic reason for the multiplier effect is that, when you spend money,
a. another person receives income.
b. another person must pay for it.
c. your money balances are reduced.
d. your net worth decreases.
a
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If a good has a negative income elasticity of demand, this indicates that the good is
A) normal. B) a substitute with another good. C) inferior. D) a complement with another good.
One country has an absolute advantage over another country if it can produce a good using smaller quantities of resources
a. True b. False Indicate whether the statement is true or false
The President of Vulcan hires you as an economic consultant. He is concerned that the output level in Vulcan is too high and that this will cause prices to rise. He feels that it is necessary to reduce output by $10 billion. He tells you that the MPC in Vulcan is 0.6. Which of the following would be the best advice to give to the Vulcan president?
A. increase taxes by $10 billion B. reduce government purchases by $10 billion C. reduce government purchases by $4 billion D. increase taxes by $2.5 billion
The table below contains hypothetical international balance-of-payments data for the United States. All figures are in billions. Compute with the appropriate sign (+ or ?) and enter in the table the six missing items. What was the condition of the balance of payments in the United States?
