If the marginal propensity to consume is 0.80, the value of the spending multiplier will be 4
a. True
b. False
Indicate whether the statement is true or false
False
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Suppose you own some German government bonds that pay you interest every year. This interest is entered into which of the balance of payments accounts?
A) trade account B) interest account C) current account D) capital and financial account E) official settlements account
If the average propensity to consume is initially 0.8, the marginal propensity to consume is 0.75, and real disposable income increases by $1000, the new value of saving is
A) $200. B) $250. C) $800. D) $750.
If expectations of future income become more optimistic, which of the following would occur?
a. Nothing would occur. b. The consumption-income line would shift downward. c. The consumption-income line would shift upward. d. There would be an rightward movement along the consumption-income line. e. There would be a leftward movement along the consumption-income line.
Coal is used as a source of energy in many manufacturing processes. Assume a long strike by coal miners reduced the supply of coal and increased the price of coal. This would cause
A. the short-run aggregate supply curve to become flatter. B. the short-run aggregate supply curve to shift to the right. C. the short-run aggregate supply curve to shift to the left. D. the short-run aggregate supply curve to become nearly vertical at all levels of output.