If the MPC is .9, the spending multiplier will be:
a. 4
b. 10
c. 9
d. 5
b. 10
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The credit supply curve is:
A) horizontal. B) vertical. C) downward sloping. D) upward sloping.
The quantity theory of money assumes that
A) the velocity of money is constant. B) the velocity of money is negative. C) the velocity of money fluctuates unpredictably. D) the velocity of money is zero.
Suppose each worker must use only one shovel to dig a trench, and shovels are useless by themselves. In the short run, an increase in the price of shovels will result in
A) fewer shovels being purchased. B) more workers being hired. C) a decrease in the firm's output. D) no change in the firm's output.
The present discounted value of a future payment can be calculated using which of the following formulas?
A. (Current payment) ÷ [(1 + Interest rate) N]. B. (Future payment) ÷ [(1 + Interest rate) N]. C. [(1 + Interest rate) N] ÷ (Future payment). D. [(1 + Interest rate) N] ÷ (Current payment).