What was the main finding of Ramey's study on government expenditure multipliers?
What will be an ideal response?
According to Ramey's study, the government spending multiplier lies between 0.6 and 1.2. She has estimated the multiplier by comparing the growth of GDP after one large government spending shock to the growth of GDP in a period that did not experience such a shock.
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The objective of rent controls is to
A) ensure an adequate supply of rental housing for the poor. B) keep rents below levels that would be observed in a freely competitive market. C) encourage the construction of new rental units. D) raise revenue for the local government.
An elastic response in the quantity of a good demanded would be caused by
A) the availability of many substitutes. B) a lack of substitutes. C) a lack of sensitivity to the good's price. D) the good representing a small portion of a person's budget.
If a surplus exists in a market, then we know that the actual price is
a. above the equilibrium price, and quantity supplied is greater than quantity demanded. b. above the equilibrium price, and quantity demanded is greater than quantity supplied. c. below the equilibrium price, and quantity demanded is greater than quantity supplied. d. below the equilibrium price, and quantity supplied is greater than quantity demanded.
In the short run, a firm operating in a competitive industry will produce the quantity of output where price equals marginal cost as long as the
a. price is less than average total cost. b. marginal revenue exceeds the marginal cost. c. price is greater than average variable cost. d. price is greater than average fixed cost but less than average variable cost.