As the marginal propensity to consume (MPC) increases, the spending multiplier:
a. increases.
b. decreases.
c. remains constant.
d. becomes indefinable.
a
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Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
How does the Fed increase the level of reserves in the banking system?
A) by lowering interest rates B) by buying bonds C) by raising interest rates D) by selling bonds
Macroeconomics seeks to understand
A) economic growth, business cycles, and inflation. B) industry sales, marketing strategies, and corporate growth. C) product demand, product cost, and profit maximization. D) public choices, private choices, and consumer maximization.
Strategic trade policy requires ALL of the following EXCEPT
A) subsidies set before output levels. B) non-retaliation of the trading partner. C) credible actions on the part of the subsidizing government. D) incomplete information on the part of the government.