The largest component of planned aggregate expenditure is:
A. investment.
B. exports.
C. government purchases.
D. consumption.
Answer: D
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Mainstream economists believe that Keynesian economists overstate the effect of the multiplier effect. Which of the following statements would mainstream economists NOT consider to be accurate?
A) A fiscals stimulus does not provide a 'free lunch' but does 'crowd out' private consumption expenditure and investment. B) A fiscal stimulus is a vital tool to fight recession and depression due to the multiplier effect. C) Effects of a fiscal stimulus are small and short lived. D) A fiscal stimulus results in bigger government, lower potential GDP, and slower real GDP growth. E) Effects of a fiscal stimulus are incapable of working fast enough to make a difference.
Why do economists use graphs in their work?
Please provide the best answer for the statement.
When a unit tax of $2 is levied on a product
A) the entire $2 is paid by the consumer. B) the entire $2 is paid by the producer. C) both the consumer and producer pay $2 each. D) the consumer pays part of the $2 and the producer pays the rest.
Refer to the information provided in Figure 5.3 below to answer the question(s) that follow.
Figure 5.3Refer to Figure 5.3. Use the midpoint formula. If the price of a gardenburger increases from $8 to $10, the price elasticity of demand equals ________ and demand is ________.
A. -9.0; inelastic B. 4.5; elastic C. -4.5; elastic D. -0.5; inelastic