In an IS-LM model with an upward-sloping LM curve and a downward-sloping IS, how does the expenditure multiplier compare to [1/(1-b)]?
A) It is equal to it.
B) It is greater.
C) It is smaller.
D) Cannot be answered with the information given.
A
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Refer to Table 19-15. Consider the following data on nominal GDP and real GDP (values are in billions of dollars): The GDP deflator for 2015 equals
A) 94.1. B) 105.1. C) 106.2. D) 108.5.
Brad ate four bags of chips at the baseball game. The first bag tasted best, but he found that as he ate more chips the amount of extra satisfaction he was receiving was beginning to fall. This would demonstrate
A. the law of diminishing costs. B. the law of diminishing marginal utility. C. the law of total utility maximization. D. the law of zero utility.
What effect will an increased demand for housing in the suburbs of a major city have on the cost of vegetable farming in the suburbs?
A) No effect, since one cannot grow vegetables on land on which housing has been constructed. B) The cost will decline because only very fertile land will now be used for growing vegetables. C) The cost will rise because it will become more expensive to grow vegetables. D) The cost won't change, because there has been no change in physical conditions. E) We cannot predict unless we know what has happened to the demand for vegetables.
In the Keynesian aggregate expenditures model, "aggregate expenditures" refer to:
a. the amount of GDP that could be produced if unemployment were zero. b. the combined expenditures of consumers, businesses, governments, and foreigners (net exports). c. the amount of demand for consumer goods that would arise if all citizens had all the income they wanted. d. consumer spending measured in constant prices.