Mathematically, the value of the spending multiplier in terms of the marginal propensity to consume (MPC) is given by the formula:
a. MPC ? 1.
b. (MPC ?1) / MPC.
c. 1 / MPC.
d. 1 / (1 ? MPC).
d
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According to John Maynard Keynes,
A) Say's Law is always correct. B) prices and wages move up and down freely. C) effective demand determines real GDP. D) a free market economy automatically finds equilibrium at full employment. E) supply creates its own demand.
The above table gives the government outlays and tax revenues from 2008 through 2012 for two countries. In 2011 country A had a ________ and country B had a ________
A) budget deficit; budget deficit B) balanced budget; budget surplus C) balanced budget; budget deficit D) budget surplus; budget surplus E) budget surplus; balanced budget
Which of the following is one reason why trade makes all parties better off? a. Because it always expands the amount of domestic production of each good and service, and more is preferred to less. b. Because it permits all parties to acquire some items better suited to their tastes
c. Because it makes people appreciate what they have, and they are happier. d. Because it encourages consumption rather than saving.
Payments made out of earnings, in the form of either cash or stock, to the owners and shareholders of a business are known as
a. distributions b. dividend payments c. retained earnings d. salaries e. business expenses