The larger the MPC:
a. the smaller the multiplier
b. the smaller the effect of a given increase in government purchases on consumption purchases.
c. the larger the effect of business taxes which reduce investment on aggregate demand.
d. the less powerful changes in individual taxes will be in changing aggregate demand.
c
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Fully anticipated inflation occurs when
A) the actual inflation rate equals the anticipated inflation rate. B) the actual inflation rate is less than the anticipated inflation rate. C) the inflation rate is zero. D) the anticipated inflation rate and the unanticipated inflation rate are equal.
Amanda inherited the only local cable TV/Internet company in town after her father passed away. The company has a local monopoly on the delivery of high-speed Internet service. The company is completely unregulated by the government and is therefore free to operate as it wishes. Assume that Amanda understands the true power of her new monopoly. Which of the following statements is (are) correct?
(i) She will be able to set the price of high-speed Internet service at whatever level she wishes. (ii) The customers will be forced to purchase high-speed Internet service at whatever price she wants to set. (iii) She will be able to achieve any profit level that she desires. a. (i) only b. (ii) only c. (i) and (iii) only d. (i), (ii), and (iii)
Social Security contributions are
A) a voluntary dollar amount that people contribute towards Social Security. B) entirely paid by your employer. C) mandatory taxes partially paid out of workers' wages and salaries. D) collected only from people earning more than $120,000 a year.
Which of the following is a true statement about the length of recessions and expansions in the United States economy?
A) After 1950, the length of expansions were much less than the length of recessions. B) After 1950, the length of expansions were brief and almost nonexistent. C) After 1950, the length of expansions were much longer than the length of recessions. D) After 1950, the length of expansions equaled the length of recessions.