« previous next »

Author Question: In an economy with no income taxes or imports, the marginal propensity to consume is 0.80. The ... (Read 88 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?

Many medications that are used to treat infertility are injected subcutaneously. This is easy to do using the anterior abdomen as the site of injection but avoiding the area directly around the belly button.

Did you know?

According to the FDA, adverse drug events harmed or killed approximately 1,200,000 people in the United States in the year 2015.

Did you know?

In the United States, congenital cytomegalovirus causes one child to become disabled almost every hour. CMV is the leading preventable viral cause of development disability in newborns. These disabilities include hearing or vision loss, and cerebral palsy.

Did you know?

Signs and symptoms that may signify an eye tumor include general blurred vision, bulging eye(s), double vision, a sensation of a foreign body in the eye(s), iris defects, limited ability to move the eyelid(s), limited ability to move the eye(s), pain or discomfort in or around the eyes or eyelids, red or pink eyes, white or cloud spots on the eye(s), colored spots on the eyelid(s), swelling around the eyes, swollen eyelid(s), and general vision loss.

Did you know?

Astigmatism is the most common vision problem. It may accompany nearsightedness or farsightedness. It is usually caused by an irregularly shaped cornea, but sometimes it is the result of an irregularly shaped lens. Either type can be corrected by eyeglasses, contact lenses, or refractive surgery.

Worldwide Variations in Population and Income Levels Developed countries represent only 18% of the Worldwide Variations in Population and Income Levels Developed countries represent only 18% of the
The More Things Change, The More They Say the Same: Dividing the Nation's Income The More Things Change, The More They Say the Same: Dividing the Nation's Income
Ten Leading Causes of Death in Low-Income Countries, 2008 Ten Leading Causes of Death in Low-Income Countries, 2008
Japan’s Economy and Society Japan’s Economy and Society
Income Distribution in the United States, 2009 Income Distribution in the United States, 2009
Solow Model with Saving Dependent on Income Level Solow Model with Saving Dependent on Income Level
Video: Blood Flow Through the Kidneys

For a complete list of videos, visit our video library