When national income increases from $300 billion to $400 billion, national consumption increases from $300 billion to $360 billion. At Y = $400 billion, the MPC is
a. 0.2
b. 0.5
c. 0.6
d. 0.67
e. 1.33
C
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When comparing the standard of living in two countries it is important to adjust total output for differences in:
A. political systems. B. geographic area. C. population. D. employment levels.
The substitution effect of a Giffin good is:
A. negative. B. positive. C. positive or negative. D. zero.
If there is a shortage, there is _____ search activity.
Fill in the blank(s) with the appropriate word(s).
As discussed in the Case in Point on the size of the fiscal multiplier, a study conducted by John Taylor on the effect of fiscal policy since the year 2000 suggests that
A) the multiplier effect of fiscal policy is much less than that for monetary policy. B) temporary fiscal policy financed through government borrowing implies a multiplier value between 0.8 and 1.5. C) fiscal policy has little effect on the economy and that the multiplier value is effectively zero. D) statistical models are inadequate to determine the multiplier and the multiplier value likely varies based on the state of the economy.