If firms increase their investment spending, the resulting change in equilibrium GDP is equal to the change in investment spending
a. multiplied by 2.5
b. alone
c. multiplied by the expenditure multiplier
d. divided by the marginal propensity to consume
e. plus the change in consumption spending
C
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Suppose a price ceiling is set by the government below the market equilibrium price. Which of the following will result?
a. The demand curve will shift to the left. b. The quantity demanded will exceed the quantity supplied. c. The quantity supplied will exceed the quantity demanded. d. There will be a surplus.
If the MRP of labor is below the wage rate, the firm should lay off workers
a. True b. False Indicate whether the statement is true or false
Which of the following is true of the White test?
A. The White test is used to detect the presence of multicollinearity in a linear regression model. B. The White test cannot detect forms of heteroskedasticity that invalidate the usual Ordinary Least Squares standard errors. C. The White test can detect the presence of heteroskedasticty in a linear regression model even if the functional form is misspecified. D. The White test assumes that the square of the error term in a regression model is uncorrelated with all the independent variables, their squares and cross products.
When per capita real GDP is increasing, real output is growing:
A. more rapidly than prices. B. more rapidly than population. C. less rapidly than prices. D. less rapidly than population.