If the marginal propensity to consume (MPC) is 0.8, the multiplier is
A) 0.8. B) 5.0. C) 1.2. D) 0.2.
B
You might also like to view...
Refer to Figure 16-9. Given that the economy has moved from point A to point B in the graph above, which of the following would be the appropriate fiscal policy to achieve potential GDP?
A) decrease the money supply B) increase interest rates C) increase government spending D) increase taxes
The poverty rate is the percentage of the population whose family income falls below an absolute level called the
Macroeconomics focuses on:
A. the individual units that make up the whole of the economy. B. total output and the general level of prices in the economy. C. how a business determines how much output to produce. D. studies of how individual markets and industries are organized.
Unexpected inflation can often
A. reduce price levels below cost. B. help lenders collect payments in more valuable dollars. C. reduce wages below the inflation rate. D. help borrowers by allowing them to pay back lenders with less valuable dollars.