When the MPC = 0.9, the multiplier is

The price elasticity of demand is

A) always positive, so there is no reason to consider the absolute value of the price elasticity of demand. B) always negative, but by convention, economists typically express the price elasticity of demand as an absolute value. C) always equal to -1, which by convention economists typically express as an absolute value, or 1. D) always equal to zero, so there is no reason to consider the absolute value of the price elasticity of demand.

As the large baby-boom generation moves into the retirement phase of life, this will

a. make it easier for the federal government to finance its budget deficit because the baby-boomers will be the wealthiest generation of retirees in American history. b. make it easier for the federal government to reduce spending because senior citizens do not spend much on consumption. c. make it more difficult for the federal government to finance its budget deficit because the retirement of the baby-boomers will mean more expenditures for Social Security and Medicare. d. not affect the federal deficit because there is no reason to expect that either federal spending or tax revenues will be influenced by the retirement of the baby-boomers.

John Maynard Keynes believed the ideas of economists to be

a. generally incorrect. b. powerful. c. academic and without practical application. d. rantings of madmen.

If households purchase $60,000 worth of consumer goods and firms produce $50,000 worth of consumer goods, then

A) inventory changes are -$10,000. B) inventory changes are +$10,000. C) new capital goods expenditures (by firms) are $10,000. D) consumer goods expenditures are $10,000.