Suppose that the marginal propensity to save (MPS) equals 0.2. The value of the multiplier would be
A. 2.
B. 1.25.
C. 20.
D. 5.
Answer: D
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Patrick is considering two different jobs in the same city-one as a bicycle courier, and the other as a mail room clerk. Both require equivalent training. He finds neither job very appealing, but, if they pay the same wage rate, Patrick would prefer to work as a mail room clerk. In order for Patrick to find the two jobs equally attractive, the
a. mail room job must pay a compensating wage differential b. mail room job must pay a preference premium c. courier job must pay a compensating wage differential d. courier job must involve longer working hours e. mail room job must involve longer working hours
GDP
A. is a flow measure since it represents the value of a flow of production over a year's period. B. could be either a stock or flow measure depending upon whether it is measured in dollars or units of production. C. is a stock measure since it represents the total market value. D. is neither a stock or flow measure since it is measured in dollars.
Refer to the diagram. Point b would not be permanent because the:
A. economy would move from b to a on PC 1 .
B. short-run Phillips Curve would shift from PC 1 to PC 2 and unemployment would increase to the natural rate at c.
C. economy would immediately move from b to c to d.
D. economy would move from b directly to d.
The 1819 panic was caused by the Second Bank of the United States, which called on the state banks to redeem their notes in order to acquire $4 million in specie to pay the borrowing that had been undertaken in Europe in 1803 to finance the Louisiana
Purchase. Indicate whether the statement is true or false