What is the government purchases multiplier if the tax rate is 0.2 and the marginal propensity to consume is 0.8? Assume the economy is closed
A) 2.78 B) 5 C) 6.25 D) 100
A
You might also like to view...
The free-rider dilemma is associated with:
A.) Private goods. B.) Public goods. C.) Externalities. D.) Market power.
In Figure 5.8, if the supply curve moves from S3 to S4,
A. the firm will go from making an economic profit to a normal profit. B. the firm will go from making a normal profit to a loss that is big enough to make it want to shutdown. C. the firm will make a smaller economic profit than they used to. D. the firm will go from making a normal profit to a loss but one that is not big enough to make it want to shutdown.
By 1937, when a new recession began in the midst of the Great Depression,
A. GDP had almost recovered to its 1929 level, but unemployment was still above the 1929 level. B. both GDP and unemployment had returned to near their 1929 levels. C. unemployment had almost fallen back to its 1929 level, but GDP had yet to recover to its 1929 level. D. neither GDP nor unemployment had returned to near their 1929 levels.
You borrow $40,000 at an interest rate of 5% to open Organic Foods, an all-natural food store. You will earn an economic profit if the return on your investment is
A. 5%. B. greater than 5%. C. 10% or greater. D. between 0 and 5%.