If the marginal propensity to consume is 0.6, what is the long-run expenditure multiplier?
a. 0.0
b. 2.0
c. 2.5
d. 10.0
e. 1.0
A
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A short-run change in ________ is referred to as a business cycle
A) the currency exchange rate B) the expenditure incurred by the government C) the aggregate price level D) the growth rate of output
The above figure shows the market for apples. If the government restricts output to no more than 300 pounds, then
A) 300 pounds of apples will be sold at $3. B) 200 pounds of apples will be sold at $3. C) no apples will be sold. D) None of the above.
Refer to the graph shown that depicts a third-party payer market for prescription drugs. What happens to total expenditures in this market if a $2 co-pay is established compared to a free-market equilibrium?
A. Expenditures fall by $120 B. Expenditures rise to $270 C. Expenditures remain at $120 D. Expenditures rise to $240
Explain why some firms may suffer diseconomies of scale.
What will be an ideal response?