Given a constant GDP gap, the higher the spending multiplier, the smaller will be the recessionary gap
a. True
b. False
Indicate whether the statement is true or false
True
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The equilibrium level of real GDP is $1,000, the target level of real GDP is $1,250, and the marginal propensity to consume (MPC) is 0.60. The target can be reached if government spending is:
A. increased by $60 billion. B. increased by $100 billion. C. increased by $250 billion. D. held constant.
Which of the following is not a rationale for protectionist policies?
A. Improve the welfare of domestic consumers. B. Protect domestic workers from foreign competition. C. Help domestic firms establish a world monopoly in a particular market. D. Protect an infant industry from foreign competitors.
A widget costs $1000 in the US and CAD$1200 in Canada. The current exchange rate is 1USD=1.09CAD. Given purchasing power parity, the Canadian dollar would_______to equilibrate prices
a. Appreciate b. Depreciate c. Not change d. None of the above
For a given increase in price, a greater elasticity of demand will result in a greater a. increase in quantity demanded. b. increase in demand
c. decrease in quantity demanded. d. decrease in demand.