If an increase in investment of $100 billion generates an increase of $500 billion in real GDP, the multiplier is
A. 20
B. 50
C. 1.50.
D. 5.00.
Answer: D
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What will be an ideal response?
Sarah and Claire are sisters. Their aunt gave 10 cookies to Sarah and asked her to share some with Claire. She could choose how many she would give her, but if Claire was not happy with her share, her aunt would take back all the cookies
a) How should Sarah decide how many cookies to give Claire if Claire prefers more cookies to fewer cookies? b) Will there be any change in her decision if she knows that Claire values fairness?
The principal-agent problem is a problem
A) of the power system of boss and subordinate where the boss (principal) exerts influence over his subordinates (agents) using punishment or threat. B) that exists when a person (principal) has more information about the task than the agent he hires to perform the task. C) caused by agents pursuing their own interests rather than the interests of the principals who hired them. D) caused by a person (principal) who hires an agent to act on his behalf but is unwilling to delegate authority to the agent to carry out the task in the best possible way.
Under conditions of perfect competition, marginal revenue
a. exceeds average revenue. b. is less than average revenue. c. always exceeds marginal cost. d. equals average revenue.