Economic models:
A) are used to explain how people think.
B) are used to explain how people behave.
C) are essential representations of the real world.
D) are never used for making economic projections or predictions.
Ans: B) are used to explain how people behave.
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What is the impact of an interest ceiling on bank deposits but not on loans?
If the marginal propensity to consume were two-thirds, the multiplier would be
a. 1 1/2. b. 1/3. c. 1 2/3. d. 3.
What effect does the following transaction have on the U.S. balance of payments?(Choose the proper debit and credit entries.)The U.S. Federal Reserve intervenes to puchase euros in the foreign exchange market
a. Debit the U.S. financial account; credit the U.S. financialaccount. b. Credit the U.S. financial account; debit the U.S. financialaccount. c. Debit the U.S. financial account; credit the U.S. current account. d. Credit the U.S. financial account; debit the U.S. current account.
Compared to a country with an MPC of 0.8, a country with an MPC of 0.6 would have to change government expenditures by ________ as much to have the same impact on real GDP.
A. twice B. three times C. four times D. five times