If the MPS is 0.60, MPC
A) is 1.60.
B) is 0.40.
C) is 0.30.
D) cannot be determined by the given information.
Answer: B) is 0.40.
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Maintaining a fixed exchange rate over the long run is today
A) virtually impossible. B) more vulnerable to speculative attacks than in the past. C) preferable. D) possible only in special cases such as maintaining strict capital controls. E) aided by technology which allows instant movement of money between financial markets in different countries.
During the economic crisis of 2008, the Fed acquired the authority to
a. pay interest to commercial banks on their reserves. b. determine the size of the budget deficit or surplus of the Federal Government. c. require the Treasury to print and issue additional currency. d. purchase gold in sufficient amounts to back the U.S. dollar.
Economists normally assume that the goal of a firm is to
a. maximize its total revenue. b. maximize its profit. c. minimize its explicit costs. d. minimize its total cost.
Which of the following is NOT a characteristic of monopolistic competition?
A) Entry and exit is restricted. B) Firms compete on price. C) A large number of firms compete. D) Firms compete on product quality.