a tool used by the FED to control the quantity of money
What will be an ideal response?
open market operations
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If the marginal propensity to save (MPS) is 0.25, the value of the spending multiplier is:
a. 1. b. 2. c. 4. d. 9.
In equilibrium under monopolistic competition: a. firms always earn profits in the short run
b. firms always suffer losses in the short run. c. output is at the socially efficient level in the long run. d. marginal revenue is less than price.
During recessions, the government tends to run a budget deficit
a. True b. False Indicate whether the statement is true or false
The substitution bias in the consumer price index refers to the idea that consumers ________ the quantity of products they buy in response to price, and the CPI does not reflect this and ________ the cost of the market basket
A) change; overestimates B) change; underestimates C) do not change; overestimates D) do not change; underestimates