The smaller the mpc, the ________ the income-expenditure multiplier and the ________ the effect of a change in autonomous spending on short-run equilibrium output.
A. larger; smaller
B. larger; larger
C. smaller; larger
D. smaller; smaller
Answer: D
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Classifying a good as nonrival means
A) that there is a surplus of the good. B) that the good is produced in a competitive market. C) that the producer can prevent people from consuming it. D) that many people can consume the good simultaneously.
Which of the following is TRUE?
A) Points along the aggregate supply curve show the equilibrium levels of output and prices that are consistent on the demand side of the economy. B) Points along the aggregate demand curve show the equilibrium levels of output and prices that are consistent on the supply side of the economy. C) Aggregate demand shows the levels of GDP and prices where expenditure decisions and production decisions match. D) Aggregate supply shows the levels of GDP and prices where expenditure decisions and production decisions match.
In the simple circular flow model containing just households and business firms, all income is received by households in exchange for
A) consumer expenditures. B) wages. C) labor services. D) product.
Common stockholders
A) must be paid a dividend. B) interest. C) may or may not be paid a dividend. D) must buy new shares from the company.