The expenditure multiplier applies only to changes in government spending
a. True
b. False
Indicate whether the statement is true or false
False
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Lifetime income is distributed
A) less equally than annual income and less equally than measured wealth. B) less equally than annual income and more equally than measured wealth. C) more equally than annual income and less equally than measured wealth. D) more equally than annual income and more equally than measured wealth.
The cross elasticity of demand for good A with respect to good B is 0.2 . A 10 percent change in the price of good B will lead to a ____ percent change in the quantity of good A demanded. Goods A and B are _______
A. 2; substitutes B. 0.5; complements C. ?2; complements D. ?0.5; substitutes
Forward contracts are of limited usefulness to financial institutions because
A) of default risk. B) it is impossible to hedge risk. C) they are relatively inflexible. D) of interest-rate risk.
Horizontally summing different supply curves assumes
A) that individual firms cannot influence the good's price. B) that all firms operate in collusion. C) that only firms who volunteer are included in the summation. D) all firms produce the same amount of output.