« previous next »

Author Question: In an economy with no income taxes or imports, the marginal propensity to consume is 0.80. The ... (Read 40 times)

s.tung

  • Hero Member
  • *****
  • Posts: 577
on: Jun 29, 2018
In an economy with no income taxes or imports, the marginal propensity to consume is 0.80. The expenditure multiplier is
 
  A) 1.25. B) 10.0. C) 0.80. D) 5.00. E) 0.20.

Question 2

If the Fed makes the quantity of money grow at the same rate as the growth rate of real GDP and velocity does not change, in the long run what happens to the price level and the inflation rate?
 
  What will be an ideal response?


cegalasso

  • Sr. Member
  • ****
  • Posts: 295
Reply #1 on: Jun 29, 2018
Answer to Question 1

D

Answer to Question 2

If the quantity of money is growing at the same rate as real GDP and velocity does not change, then the price level does not change. In this case, the inflation rate equals 0 percent.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question

s.tung

  • Hero Member
  • *****
  • Posts: 577
Reply #2 on: Jun 29, 2018
Thank you


cegalasso

  • Sr. Member
  • ****
  • Posts: 295
Reply #3 on: Jun 29, 2018
No problemo


« previous next »
 

Did you know?

Alcohol acts as a diuretic. Eight ounces of water is needed to metabolize just 1 ounce of alcohol.

Did you know?

There used to be a metric calendar, as well as metric clocks. The metric calendar, or "French Republican Calendar" divided the year into 12 months, but each month was divided into three 10-day weeks. Each day had 10 decimal hours. Each hour had 100 decimal minutes. Due to lack of popularity, the metric clocks and calendars were ended in 1795, three years after they had been first marketed.

Did you know?

Blood in the urine can be a sign of a kidney stone, glomerulonephritis, or other kidney problems.

Did you know?

Methicillin-resistant Staphylococcus aureus or MRSA was discovered in 1961 in the United Kingdom. It if often referred to as a superbug. MRSA infections cause more deaths in the United States every year than AIDS.

Methicilli ...
Did you know?

People who have myopia, or nearsightedness, are not able to see objects at a distance but only up close. It occurs when the cornea is either curved too steeply, the eye is too long, or both. This condition is progressive and worsens with time. More than 100 million people in the United States are nearsighted, but only 20% of those are born with the condition. Diet, eye exercise, drug therapy, and corrective lenses can all help manage nearsightedness.

A graphical representation of the marginal value theorem. A graphical representation of the marginal value theorem.
This chart illustrates the four quadrants in which we can place the relationships between the state This chart illustrates the four quadrants in which we can place the relationships between the state
The Inverted Income Pyramid: The Proportion of Income Received by Each Fifth of the U.S. Population The Inverted Income Pyramid: The Proportion of Income Received by Each Fifth of the U.S. Population
Creating a Continental Economy Creating a Continental Economy
Migration and Global Economy Migration and Global Economy
Japan’s Economy and Society Japan’s Economy and Society
Video: Regulation of GFR: autoregulation via tubuloglomerular feedback, neural & hormonal regulation

For a complete list of videos, visit our video library