Multiplier effect is the additional shifts in aggregate demand that result when expansionary fiscal policy increases income and thereby increases consumer spending.
Answer the following statement true (T) or false (F)
True
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An increase in the real money supply will have its maximum effect on the equilibrium level of GDP when the
A) LM curve is vertical. B) LM curve is horizontal. C) IS curve is vertical. D) IS curve is negatively sloped.
Denise is shopping for lobsters and eclairs. When she faces budget line b1, she chooses market basket A over market basket B. When she faces budget line b2, she chooses basket B over basket C
Which assumption of consumer theory helps us determine Denise's preference ordering over basket A and basket C? A) Completeness B) More is better than less C) Transitivity D) Convexity
The consumption function is the relationship between
A) real consumption spending and real taxes. B) real consumption spending and investment spending. C) real consumption spending and real disposable income. D) real consumption spending and real saving.
When a monopolist sells the same product at different prices and the prices are NOT related to cost differences, we have
A) monopoly pricing. B) marginal cost pricing. C) price discrimination. D) price differentiation.