If the marginal propensity to consume (MPC) is 0.80, the value of the spending multiplier is 2
a. True
b. False
Indicate whether the statement is true or false
False
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If the dollar depreciates against the yen, U.S. goods sold in ________ would become less expensive and Japanese goods sold in ________ would become more expensive
A) the United States; the United States B) Japan; Japan C) the United States; Japan D) Japan; the United States
Refer to Figure 15-11. In the dynamic model of AD-AS in the figure above, the economy is at point A in year 1 and is expected to go to point B in year 2, and the Federal Reserve pursues policy. This will result in
A) unemployment rates higher than what would occur if no policy had been pursued. B) real GDP lower than what would occur if no policy had been pursued. C) short-term interest rates higher than what would occur if no policy had been pursued. D) inflation higher than what would occur if no policy had been pursued.
According to Tobin's q theory, when q is ________, firms will not purchase new investment goods because the market value of firms is ________ relative to the cost of capital
A) low; low B) low; high C) high; low D) high; high
Refer to Figure 9.7. Because of the policy, consumer surplus fell by
A) $10. B) $20. C) $12,500. D) $25,000. E) $45,000.