If the multiplier is 5, the marginal propensity to consume must be 0.8
Indicate whether the statement is true or false
TRUE
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You are analyzing the demand for good X. Which of the following will result in a shift to the right of the demand curve for X?
A) A decrease in the price of X B) An increase in the price of a good that is a complement to good X C) An increase in the price of a good that is a substitute for X D) all of the above
The Fed increases the reserve requirement, but it wants to offset the effects on the money supply. Which of the following should it do?
a. sell bonds to increase reserves b. sell bonds to decrease reserves c. buy bonds to increase reserves d. buy bonds to decrease reserves
Which of the following occurs if there is a quality-of-life innovation?
A. New goods or services are created, allowing people to do things that they could not do before. B. More of the same products can be produced at lower cost. C. Positive externalities are reduced, or negative externalities are increased. D. Positive externalities are increased, or negative externalities are reduced.
Which of the following will cause a movement along the demand curve for shoes?
A. an increase in the price of socks B. an increase in the price of shoes C. an increase in income D. all of these