the keynesian spending multiplier is a. 1/MPC b. 1/MPS c. 1/APS d. 1/APC one of
ID: 1251559 • Letter: T
Question
the keynesian spending multiplier is
a. 1/MPC
b. 1/MPS
c. 1/APS
d. 1/APC
one of the differences between keynesian and classical theory is that keynesians argue that prices
a. are flexible
b. are sticky
c. both theories agree on price behavior
a society that saves more of its income will have
a. a higher MPS and a lower MPC
b. a lower MPS and a higher MPC
c. a lower MPS and a lower MPC
d. a higher MPS and a higher MPC
if government spending pushes up equilibrium interest rates in the market, this is referred to as
a. contractionary fiscal policy
b. ricardian equivalence
c. a recessionary gap
d. the crowding out effect
an example of an expansionary fiscal policy will be
a. increasing taxes
b. lowering the discount rate
c. increasing gov. spending
d. all of the above
the gov. increase spending by $2million. this increase real income by $4million. the spending multiplier is
a. 0
b. 1
c. 2
d. 4
if the current unemployment rate is 4% and the natural rate of unemployment is 4.5% there is currently a
a. recessionary gap
b. inflationary gap
c. neither
if the federal reserve wishes to pursue an expansionary monetary policy, it will
a. increase the reserve requirement
b. buy bonds
c. increase the discount rate
d. all of the above
the potential money multiplier is equal to
a. 1/MPS
b. 1/MPC
c. 1/(reserve requirement)
d. 1/(discount rate)
if a bank decides to hold excess reserves, the actual money multiplier will be _____ the one referred to in the previous question
a. less than
b. equal to
c. more than
d. impossible to tell
as interest rates rise
a. investment spending will increase
b. households will want to hold smaller money balances
c. aggregate demand will increase
d. all of the above
an expansionary monetary policy
a. increase the price level
b. decrease imports
c. increase investment
d. all of the above
Explanation / Answer
1 b 2. b 3. a 4 d 5 c 6 c 7 b 8 b 9.c 10 a 11 b 12 d
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