Refer to the information. The multiplier in this economy is:
A. 4.
B. 5.
C. 2.5.
D. 3.5.
C. 2.5.
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In reality, the wage-gap between two countries will:
A. Always be reduced to zero through migration B. Be greater than zero because of migration costs C. Always be sufficient to cover the marginal costs of migration D. Be smaller the greater the distance between the countries
The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
According to the graph shown, total surplus is area:
A. A + B + C.
B. B.
C. A.
D. A + B.
In which of the following cases was the inflation rate 12 percent over the last year?
a. One year ago the price index had a value of 110 and now it has a value of 120. b. One year ago the price index had a value of 120 and now it has a value of 132. c. One year ago the price index had a value of 134 and now it has a value of 150. d. One year ago the price index had a value of 145 and now it has a value of 163.