Assume a closed economy, that taxes are fixed, and the marginal propensity to consume is equal to 0.8. What is the government spending multiplier?
A) 10 B) 5 C) 4 D) 3
B
You might also like to view...
According to the information presented in the text the parcel and express delivery industry could best be characterized as:
A) a perfectly competitive market. B) a monopolistically competitive market. C) an oligopoly. D) a monopoly.
The assumption that individuals act rationally implies that
a. people think only of themselves and disregard the well-being of others b. people undertake all those activities that yield benefits to themselves c. people only consider the costs of an activity to decide whether it is worthwhile d. the greater the cost of a charitable deed to a benefactor, the more likely he or she is to perform that deed e. people implicitly calculate the costs and benefits of an activity to decide if it is worthwhile
Which of the following is not true about government taxation?
a. It is an indirect way to shift resources. b. It is free of opportunity costs. c. Taxes are levied on both citizens and businesses. d. Taxes are unequally levied among citizens. e. Taxes are a tool for debt reduction.
Generally, expenses on toothpaste are a small part of a consumer's budget, so the demand for toothpaste is more likely to be
A. elastic. B. perfectly elastic. C. unit elastic. D. inelastic.