When the MPC is 0.8 and t is 0.4, then the government spending multiplier is about -1.54.
Answer the following statement true (T) or false (F)
False
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Suppose the production function for coffee (C) is C = min(B,W), where B = beans in pounds and W = water in gallons. Suppose the price of water is $.10 per gallon and the price of beans is $10 per pound. The cost minimizing combination of beans and water for C = 200 is
a. B = 200, W = 2000 b. B = 2000, W = 200 c. B = 100, W = 100 d. B = 200, W = 200
The text points out that terrorism might best be thought of as
a. an ability to accomplish specific and long-lasting political goals. b. a new type of weapon. c. a temporary and diminishing threat. d. a new kind of war.
Which of the following statements is true?
a. Money must be divisible and portable. b. Money must be relatively "scarce" if it is to have value. c. M1 is the narrowest definition of money. d. All of the answers are correct.
Which of the following will lead to a decrease in the equilibrium interest rate in the economy?
A) an increase in the price level B) a sale of government securities by the Fed C) a decrease in GDP D) an increase in the discount rate E) an increase in the reserve requirement