The simple fiscal policy multiplier occurs in the IS-LM model when ________ interest responsiveness of money demand produces a ________ LM curve
A) zero, vertical
B) zero, horizontal
C) infinite, vertical
D) infinite, horizontal
D
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The demand for loanable funds curve is
A) downward sloping when plotted against the real interest rate. B) vertical at the full employment level of investment. C) constant at the maximum expected profit rate. D) upward sloping when plotted against the real interest rate.
Which of the following is not a feature of the steady state in Solow's exogenous growth model?
A) The capital/output ratio is steady. B) Capital grows continuously. C) Consumption per worker is steady. D) Total saving is steady.
If the marginal propensity to consume (MPC) is 0.80, the value of the spending multiplier is:
a. 2. b. 5. c. 8. d. 10.
If in the short run the demand for mass transit is inelastic and in the long run the demand is elastic, then a price:
A. decrease will decrease total revenue in the short run and decrease total revenue in the long run. B. increase will increase total revenue in the short run but decrease total revenue in the long run. C. increase will decrease total revenue in the short run but increase total revenue in the long run. D. decrease will increase total revenue in the short run but decrease total revenue in the long run.