A price index number
a. is really a percentage.
b. indicates the extent of change in prices over some period of time.
c. is always greater than 100 if prices have risen during the period in question.
d. All of these.
d. All of these.
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In an economy with no income taxes or imports, the marginal propensity to consume is 0.80. The expenditure multiplier is
A) 1.25. B) 10.0. C) 0.80. D) 5.00. E) 0.20.
The distribution of income in the United States
a. became slightly more equal during the 1980s. b. did not change significantly during the 1980s. c. has become more unequal since 1980. d. has become more equal since 1980.
If you index Social Security benefits for prices rather than wages, this is likely to
A. increase benefits. B. bring about Social Security bankruptcy earlier. C. prevent Social Security bankruptcy altogether. D. reduce benefits.
If the demand for money and the supply of money both decrease, the equilibrium:
A. interest rate will decline, but we cannot predict the change in the equilibrium quantity of money. B. quantity of money and the equilibrium interest rate will both increase. C. quantity of money will increase, but we cannot predict the change in the equilibrium interest rate. D. quantity of money will decline, but we cannot predict the change in the equilibrium interest rate.