The ________ multiplier is smaller than the ________ multiplier.
A. government spending; closed economy
B. money; government spending
C. closed economy; money
D. open economy; closed economy
Answer: D
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A car dealer that maintains a large number of automobiles on their lot so that they avoid losing a sale to another dealer who has the make and model a given customer wants is engaged in ________
A) production smoothing B) work in process C) stock-out avoidance D) first degree price discrimination
The formal definition of price elasticity of demand is
A) change in quantity demanded divided by change in price. B) quantity demanded divided by price. C) percentage change in quantity demanded divided by percentage change in price. D) quantity demanded multiplied by price and divided by 100.
If the world price of coffee is higher than Colombia's domestic price of coffee without trade, then Colombia
a. should import coffee. b. has a comparative advantage in coffee and should export coffee. c. should produce just enough coffee to satisfy domestic demand. d. should produce no coffee domestically.
Most of the government budget is mandatory spending through programs like Medicare and Social Security, and much of the rest is politically difficult to alter. Because of this:
A. the amount of spending is unlikely to be implemented as economists suggest. B. fiscal policy that involves raising taxes is more likely to be implemented than fiscal policy that involves borrowing money. C. most spending is geared to perform as an automatic stabilizer, so that Congress is in fact largely irrelevant when it comes to providing a fiscal response to a recession. D. fiscal policy is always undertaken only when there is a national crisis that motivates voters to seek change.