If the marginal propensity to consume (MPC) is 0.96, the value of the spending multiplier is:
A. 25.
B. 40.
C. 96.
D. 100.
Answer: A
You might also like to view...
Autonomous expenditure is the portion of planned aggregate expenditure that:
A. equals induced expenditure. B. is independent of output. C. equals aggregate output. D. equals planned spending.
Which of the following statements is true?
A. The United States conducts most of its trade with developing nations because they tend to produce stuff that the U.S. does not have B. One reason the United States engages in trade is because it is almost entirely dependent on other nations for some products C. The record over the past two decades shows that exports to Japan are much greater than imports from that nation D. The United States has lost its position as the world's leading trading partner
If a severe drought causes the harvest of corn to be 10 percent less than anticipated, it will cause a large increase in the price of corn if
A) corn is scarce. B) the demand for corn is highly elastic. C) the demand for corn is highly inelastic. D) the supply of corn is highly elastic. E) the supply of corn is highly inelastic.
What is the major problem in a currency union?
A) Money demand becomes more erratic. B) Participating central banks may not agree on monetary policy. C) It is akin to dollarization. D) The capital account becomes difficult to define.