An increase in the MPC causes an increase in which of the following?
A) MPS
B) spending multiplier
C) savings rate
D) exports
E) aggregate supply
Ans: B) spending multiplier
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If the stock of physical capital (that is machinery, equipment, etc.) and human capital remain the same and the population increases, then
A) labor productivity will increase. B) labor productivity will decrease. C) the standard of living will increase. D) the new labor will be more productive. E) real GDP decreases.
International investors are more likely to invest in countries
A) where it is relatively easier to establish property rights to capital goods. B) where there is a significant amount of dead capital. C) which have a high amount of government inefficiency. D) where there are barriers to the ownership of capital goods.
If an effective minimum wage is set,
a. a labor surplus is created. b. a labor shortage results. c. wages fall below the market wage. d. the level of employment rises.
People hold money primarily because it
a. increases in value when there is inflation. b. serves as a store of value. c. serves as a medium of exchange. d. functions as a unit of account.