The spending multiplier:
A. grows larger as the marginal propensity to consume decreases.
B. grows smaller as the marginal propensity to consume increases.
C. grows larger as the marginal propensity to consume increases.
D. None of these is true.
Answer: C
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At an interest rate of 5 percent, the present value of $1,000 to be received two years from today is
A) less than $875. B) between $875 and $925. C) between $925 and $975. D) more than $975.
If there is a surplus in the oil market, then the price of oil will:
a. rise. b. fall. c. remain unchanged. d. react unpredictably.
By itself, if a U.S. firm builds a new factory overseas, U.S. net capital outflow rises
a. True b. False Indicate whether the statement is true or false
Developing countries do:
A. compete with one another for foreign investment, and this competition reduces the benefits from foreign investment. B. not compete with one another for foreign investment, because they have sufficient domestic saving to finance their investment needs. C. not compete with one another for foreign investment, because they lack the infrastructure to attract it in the first place. D. compete with one another for foreign investment, but this competition is beneficial to developing countries because it insures a more efficient allocation of resources.