If the marginal propensity to consume is 0.75, then the multiplier equals
A. 1/0.75.
B. 1/(1 - 0.25).
C. 1/(1 - 0.75).
D. 0.75.
Answer: C
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If a small plant is more efficient than either a medium-sized or a large plant, the situation must be one of
a. increasing returns to scale. b. decreasing returns to scale. c. constant returns to scale. d. None of these.
The economy of the former Soviet Union is best described as a
a. primitive economy. b. market economy. c. hybrid economy. d. centrally-planned economy.
A fall in the money wage rate ________ aggregate supply and ________
A) decreases; shifts the AS curve rightward B) increases; shifts the AS curve leftward C) decreases; shifts the AS curve leftward D) increases; shifts the AS curve rightward E) does not change; does not shift the AS curve
If price is less than its minimum average variable cost, a perfectly competitive firm that continues to produce in the short run
a. cannot cover any of its variable cost b. incurs a loss greater than its fixed cost c. can cover all of its fixed cost and some of its variable cost d. can cover all of its variable cost and some of its fixed cost e. can cover both its fixed costs and its variable cost