Assume the economy is in recession, the MPC is 0.80, and an increase of $200 billion in spending is needed in order to reach full employment. The target can be reached if government spending is increased by:
a. $20 billion.
b. $200 billion.
c. $80 billion.
d. $40 billion.
d
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A. more B. fewer C. the same number of
Which of the following influences the slope of the LM curve?
A) The interest-sensitivity of money demand B) The interest-sensitivity of investment C) The interest-sensitivity of government spending D) The interest-sensitivity of saving
If the official unemployment rate increases from December to January because the Christmas season is over, we can conclude that _____ is responsible for the increase
a. seasonal unemployment b. cyclical unemployment c. structural unemployment d. frictional unemployment e. underemployment
The quantity theory of money can explain which of the following?
A. If %?Y and the %?V = 0; the %?P > %?M B. If the %?Y > 0 and the %?V = 0; the %?P < %?M C. If the %?P > 0; the %?M must also be > 0 D. If the %?V = 0 and the %?M = 0; the %?P must be = 0