Some economists argue that the spending multiplier is actually less than 1. If the spending multiplier is 0.8, then a $200 billion increase in government spending will increase GDP by
A. $250 billion.
B. $200 billion.
C. $160 billion.
D. $40 billion.
Answer: C
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The demand curve for low-skilled labor lies to the left of the demand curve for high-skilled labor because
A) there are more high-skilled workers than low-skilled workers. B) high-skilled workers require more compensation than low-skilled workers. C) high-skilled workers are more productive than low-skilled labor. D) firms do not see any difference between high-skilled labor and low-skilled labor.
Some markets have many buyers and sellers but fall into the category of monopolistic competition rather than perfect competition. The most common reason for this is
A) firms in these markets make high profits. B) there are high barriers to entering these markets. C) firms in these markets sell identical products. D) firms in these markets do not sell identical products.
An increase in the real wage rate will cause
A) the labor demand curve to shift to the right. B) the labor demand curve to shift to the left. C) the quantity of labor demanded to rise. D) a movement along the labor demand curve.
In which of the following cases can we be certain that a natural resource has become scarcer?
a. both the demand for the resource and the supply of the resource have increased b. both the demand for the resource and the supply of the resource have decreased c. demand for the resource is unchanged and the supply of the resource has increased d. the demand for the resource has decreased and the supply of the resource is unchanged