The marginal propensity to consume is 0.50, marginal propensity to invest is 0.20, and the marginal propensity to import is 0.05. What is the size of the multiplier?
A) 1.00
B) 2.86
C) 3.00
D) 0.50
Answer: B) 2.86
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Classical economists believed that
a. the government should play an active role in controlling the economy b. the government can best help the economy by leaving it alone c. the economy is controlled by the government d. laissez faire will hurt the economy e. economists should offer guidance to governmental leaders
When salaries are paid more frequently, the velocity of money speeds up because individuals hold more cash
a. True b. False Indicate whether the statement is true or false
In a monopolistically competitive market,
a. the entry of new firms creates externalities. b. the absence of restrictions on entry by new firms ensures that there will be no deadweight loss. c. there are always too many firms in the market relative to the socially-optimal number of firms. d. firms cannot earn positive economic profits in the short run.
Industry A has two firms that each control 50 percent of the market. Industry B has three firms, where one firm controls 70 percent of the market and the other two firms control 15 percent of the market each. According to the HHI, which industry is more concentrated?
A. Industry A B. Industry B C. Both industries are equally concentrated. D. indeterminate from the given information.