If the marginal propensity to consume (MPC) is 0.95, then the multiplier for a change in autonomous spending will be
A. 0.05.
B. 20.
C. 95.
D. 100.
Answer: B
You might also like to view...
Recessions are typically
A) unintended and disruptive. B) easy to predict in advance. C) the result of non-monetary disturbances. D) events economists have a hard time explaining.
Which of the following would NOT cause the demand curve for bonds to shift?
A) a change in wealth B) a change in the price of bonds C) a change in the liquidity of bonds D) a change in expected inflation
If the demand curve for a good always has unitary price elasticity, what does this imply about consumer behavior?
A) Consumers do not react to a price change. B) Consumers will spend a constant total amount on the good. C) Consumers are irrational. D) Consumers do not obey the Law of Demand.
Historically, which of the following has had the highest average annual rate of return?
A) U.S. Treasury bonds B) corporate bonds C) money market mutual funds D) corporate stocks