The multiplier can be calculated by dividing
A. one by one minus the marginal propensity to invest.
B. one by one minus the marginal propensity to save.
C. the change in real GDP by the initial change in spending.
D. the initial change in spending by the change in real GDP.
Answer: C
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The spread between interest rates on low quality corporate bonds and U.S. government bonds
A) widened significantly during the Great Depression. B) narrowed significantly during the Great Depression. C) narrowed moderately during the Great Depression. D) did not change during the Great Depression.
If productivity growth equals 3.0 percent, the contribution from capital growth 1.2 percent and the contribution from labor growth 2.0 percent, then output growth must equal ________
A) 2.2 percent B) 4.2 percent C) 6.2 percent D) 7.2 percent
Setting a fair price means
a. c and e b. lowering the price until the monopolist says "unfair" c. pricing at the point where average fixed and average variable costs sum to the price d. imposing unreasonable restrictions on the price making capability of competitive firms e. pricing as if the market were actually competitive
An optimal purchase is one that maximizes total utility
a. True b. False Indicate whether the statement is true or false