If the simple spending multiplier is 8, the marginal propensity to consume (MPC) is
What will be an ideal response?
7/8
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Use the following graph to answer the next question.
If Canadian investors buy more U.S. financial and real assets, ________.
A. the demand curve will shift right B. the demand curve will shift left C. the supply curve will shift right D. the supply curve will shift left
A lender of last resort
A) makes loans when no one else will. B) makes loans without regard for risk. C) is a firm that is forced to make loans for its own survival. D) Both A and B. E) None of the above.
Assume a group of firms has formed a cartel and the cartel is in engaged in joint profit maximization. As such, each firm, acting in its own interests, has an incentive to expand production up to the point at which:
A) its marginal cost equals the marginal revenue earned by the cartel. B) its marginal cost equals the cartel-determined price of the product being sold. C) its marginal revenue equals the cartel's marginal costs of production. D) its marginal cost equals the cartel-determined marginal revenue from the good being sold.
A firm has a marginal cost of $20 and charges a price of $40. The Lerner index for this firm is:
A. 0.33. B. 0.50. C. 0.20. D. 0.75.