If the MPC is 2/3, then 2/3 of the effect of an increase in government purchases on aggregate demand will come from increased consumption
a. True
b. False
Indicate whether the statement is true or false
True
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Refer to Figure 3-1. An increase in population would be represented by a movement from
A) A to B. B) B to A. C) D1 to D2. D) D2 to D1.
If the Fed wanted to target price stability, meaning zero inflation, why should it set a target rate of inflation of around one percent?
What will be an ideal response?
Economist John Kenneth Galbraith has argued that most prices in the United States' mixed economy are set by
A. a government planning committee. B. the invisible hand. C. the nation's largest corporations. D. consumers voting with their dollars.
In fiscal year 2011, the U.S. government ran a deficit of about $1,300 billion. In fiscal year 2012, the government ran a deficit of about $1,087 billion. Other things the same, this change would be expected to have
a. decreased interest rates and investment. b. decreased interest rates and increased investment. c. increased interest rates and investment. d. increased interest rates and decreased investment.