When households' marginal propensity to consume (MPC) increases, the size of the spending multiplier:
a. also increases.
b. decreases.
c. remains unchanged.
d. reacts unpredictably.
a
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Discretionary monetary policy is defined as policy
A) that is based on the judgments of policymakers. B) for which the markets make all decisions. C) that is pursued regardless of the current state of the economy. D) that responds to a changing economy with predetermined rules. E) for which the policymaker always publicizes the policy as extensively as possible because its effectiveness depends on the public's knowledge of the policy.
When the government sets a price floor which is below the equilibrium? price:
A. a price ceiling will follow.
B. a shortage will develop.
C. a surplus will develop.
D. the equilibrium price will be maintained.
Which of the following is likely to have the most price inelastic demand?
a. tablet computers b. leather boots c. lightbulbs d. optional textbooks
All of the following are true about a monopolist except:
A. Average and marginal revenues are not the same. B. Marginal revenue is greater than price. C. Marginal revenue can be negative. D. Marginal revenue decreases with increases in output.