If the marginal propensity to consume is 0.75, then the value of the tax multiplier is
A) -2.5.
B) -3.
C) 1.25.
D) 1.4.
B
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Suppose the production of a good results in positive externalities. If output occurs at the intersection of the supply curve and the marginal social benefits curve, then
A. the socially optimal level of output will be produced. B. society will incur a net social cost. C. society will want less produced, and producers will be willing to satisfy that desire. D. there is market failure.
Which of the following is the most volatile component of private investment?
a. Plant and equipment purchases b. New home construction c. Purchases of services d. Changes in business inventories e. Consumption of nondurables
Which of the following is an exogenous variable in the Three-Sector-Model?
a. Open market operations b. Real Domestic GDP c. GDP price index d. Real risk-free interest rate e. Quantity of real credit per time period
Total factor productivity growth is that part of economic growth due to
A. capital growth times labor growth. B. capital growth plus labor growth. C. capital growth less labor growth. D. neither capital growth nor labor growth.