What do Keynesian economists believe that the expenditure multiplier is?
a. Less than one
b. Equal to one
c. Greater than one
d. Can be greater or less than one
c. Greater than one
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A decrease in stock prices will _____ the net wealth of households and _____ consumption
a. reduce; increase b. reduce; decrease c. reduce; not change d. increase; increase e. increase; decrease
Which of the following characteristics distinguishes oligopoly from other market structures?
a. Firms operating in an oligopoly are independent of each other. b. Firms operating in an oligopoly are interdependent. c. Oligopoly is the simplest of all the other market structures. d. An oligopolist does not face a downward-sloping demand curve. e. Entry into an oligopolistic market is easier than entry into a monopolistically competitive market.
A competitive market will
A. create excess demand because wants exceed needs. B. move towards equilibrium because producers set the prices. C. create excess supply because producer want profits. D. move towards equilibrium quantity because both producers and consumers act in their own best interest.
If a profit-maximizing monopolistic competitor earns positive economic profits in the short run: a. demand will become increasingly inelastic as new firms enter. b. the firm should increase its output as new firms enter
c. there must be barriers to entry into the industry. d. new firms will be attracted to the industry. e. both b. and d. are correct.