Questions from General Economics

Q: 5.1 A decrease in the marginal propensity to import will

5.1 A decrease in the marginal propensity to import will _________ the multiplier for investment spending. 5.2. The _________ is positive because consumers import more goods and services as income ri...

Q: 4.1. The multiplier for taxes is greater than the

4.1. The multiplier for taxes is greater than the multiplier for government spending. _________ (True/False) 4.2. An increase in the tax rate will _________ the government spending multiplier. 4.3....

Q: 2.1. The consumption function describes the relationship between consumption

2.1. The consumption function describes the relationship between consumption expenditures and the level of _________. 2.2. A decrease in consumer confidence will shift the consumption function ______...

Q: 6.1. An increase in the price level will _________

6.1. An increase in the price level will _________ GDP and thereby move the economy _________ the aggregate demand curve. 6.2. At any price level, the income-expenditure model determines the level of...

Q: 1.1. Investment is a larger component of GDP than

1.1. Investment is a larger component of GDP than consumption, but it is much more volatile. _________ (True/False) 1.2. Investment spending is very _________, since it moves in conjunction with GDP....

Q: 2.1. If the interest rate is 25 percent,

2.1. If the interest rate is 25 percent, the present value of $500 paid 2 years from now equals _________. 2.2. If the interest rate is 10 percent, the present value of $300 paid 1 year from now equa...

Q: 4.1. An illiquid financial asset is one that can

4.1. An illiquid financial asset is one that can easily be used to buy goods and services. _________ (True/False) 4.2. Creation of _________ following the Great Depression has greatly reduced the lik...

Q: 3.1. If a project costs $100 and pays

3.1. If a project costs $100 and pays $105 in year 1 and $110 in year 2, the maximum interest rate at which the present value of investment exceeds its cost is _________. 3.2. As real interest rates...

Q: 3.1. The Federal Reserve is the “_________ of last

3.1. The Federal Reserve is the “_________ of last resort.” 3.2. The United States is divided into 12 districts, each of which has a Federal Reserve Bank. These banks do not participate in monetary p...

Q: 5.1. On a graph of the labor market,

5.1. On a graph of the labor market, show the effects of an increase in the payroll tax. 5.2. On a graph of the labor market, show the effects of a negative shock to technology on wages and employmen...