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Author Question: Which of the following would make the spending multiplier smaller? A) a reduction in marginal ... (Read 116 times)

mia

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  • Posts: 564
on: Jun 30, 2018
Which of the following would make the spending multiplier smaller?
 
  A) a reduction in marginal propensity to save
  B) a small initial trade deficit
  C) a reduction in the marginal propensity to import
  D) a real appreciation
  E) none of the above

Question 2

Which of the following explains why the original Phillips curve relation disappeared or, as some economists have remarked, broke down in the 1970s?
 
  A) Individuals assumed the expected price level for the current year would be equal to the actual price level from the previous year.
  B) Individuals assumed that expected inflation would be zero
  C) Individuals changed the way they formed expectations of inflation.
  D) Monetary policy became contractionary.
  E) More labor contracts became indexed to changes in inflation.


billybob123

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Reply #1 on: Jun 30, 2018
Answer to Question 1

E

Answer to Question 2

C


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