If the MPC is 0.70, then the spending multiplier is equal to:
a. 0.70.
b. 0.30.
c. 0.14.
d. 3.33.
e. 5.
d
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Which of the following statements is correct?
A. In the short run, interest rate differentials have the greatest impact on exchange rates. B. In the medium run, differences in growth rates of aggregate demand have the greatest impact on exchange rates. C. In the long run, price and inflation differentials have the greatest impact on exchange rates. D. All of the above are correct.
When the consumption of a good generates an external benefit:
a. the private benefit consumers receive from the good will be higher than the true social benefit. b. too much of the good will tend to be produced from the viewpoint of economic efficiency. c. the community generally suffers an exactly offsetting external cost from the production of the good. d. the market demand curve will understate the total benefits derived from consumption of the good, and as a result, too little of it will be produced and consumed.
GDP in an economy is $4600 billion. Consumer expenditures are $3500 billion, government purchases are $900 billion, and gross private domestic investment is $400 billion. Net exports are:
A. -$400 billion. B. +$200 billion C. +$400 billion. D. -$200 billion.
What is the difference between average, total, and marginal revenue? What is the shape of the total and marginal revenue curves for the individual competitive firm?
What will be an ideal response?