If consumption spending is the only variable of aggregate expenditure dependent on income, the multiplier is MPC/(1 - MPC)
a. True
b. False
Indicate whether the statement is true or false
False
You might also like to view...
According to the concept of comparative advantage, a good should be produced in that nation in which
A) domestic opportunity cost is greatest. B) domestic opportunity cost is the smallest. C) money is used. D) terms of trade are maximized.
Which of the following could cause the supply of carrots to decrease?
a. Consumers' incomes decrease. b. There is a technological advance in carrot production. c. Fertilizer costs increase. d. The number of farmers growing carrots increases. e. The price of carrots decreases.
A decrease in the quantity of resources
What will be an ideal response?
Both Stan and Kyle own potato chip factories. Stan's factory has low fixed costs and high variable costs. Kyle's factory has high fixed costs and low variable costs. Currently, each factory is producing 5,000 bags of potato chips at the same total cost. Complete the following statement with the correct answer. If each produces
A. more, their costs will be equal. B. less, the costs of Kyle's factory will exceed those of Stan's factory. C. more, the costs of Kyle's factory will exceed those of Stan's factory. D. less, their costs will be equal.