Assume that full-employment national income is Y = $1,200 billion, the current equilibrium national income is Y = $800 billion, and the MPC is 0.5 . What level of aggregate expenditure will close the recessionary gap?
a. $50 billion
b. $80 billion
c. $140 billion
d. $200 billion
e. $400 billion
D
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During the Civil War (1861–1865), hyperinflation occurred in
(a) the North. (b) the South. (c) both the North and South. (d) neither the North nor the South.
A market maker faces the following demand and supply for widgets. Eleven buyers are willing to buy at the following prices: $15, $14, $13, $12, $11, $10, $9, $8, $7, $6, $5 . Eleven sellers are also willing to sell at the same prices. If the market maker wants to make three transactions, what should he ask (the buyers)
a. $12 b. $13 c. $14 d. $15
If the central bank in some country raised the reserve requirement, then the money multiplier for that country
a. would increase. b. would not change. c. would decrease. d. could do any of the above.
Centrally planned economies are not constrained by the problem of scarcity.
Answer the following statement true (T) or false (F)