Multiple Choice
If the MPC is 3/4 then the multiplier is
A) 4, so a $100 increase in government spending increases aggregate demand by $400.
B) 4, so a $100 increase in government spending increases output by $400.
C) 4/3, so a $100 increase in government spending increases aggregate demand by $400/3.
D) 4/3, so a $100 increase in government spending increases output by $400/3.
Correct Answer:
Verified
Correct Answer:
Verified
Q39: In the short run,open-market sales<br>A)increase the price
Q48: The term crowding-out effect refers to<br>A)the reduction
Q50: Which U.S.president,when asked why he had proposed
Q56: In 1961,President John F.Kennedy,acting upon advice from
Q77: The theory of liquidity preference is largely
Q135: According to liquidity preference theory,an increase in
Q151: During a recession unemployment benefits rise. This
Q175: Economists who are skeptical about the relevance
Q200: When the Fed buys government bonds, the
Q202: If the inflation rate is zero, then