Author Question: Firms have inventories that they can draw down to meet an increase in demand. This will (Read 35 times)

student77 · **on:** Apr 19, 2019

Question 1

If it becomes more expensive for firms to hold excess capital and labor, the multiplier will

◦ decrease.
◦ remain unchanged.
◦ increase.
◦ either increase or decrease depending on the value of the
MPC.

Question 2

Firms have inventories that they can draw down to meet an increase in demand. This will

◦ have no effect on the multiplier, because the
MPC remains unchanged.
◦ increase the size of the multiplier, because firms will be able to respond more quickly to a change in demand.
◦ decrease the size of the multiplier, because output will not immediately respond to changes in demand.
◦ either increase or decrease the multiplier, depending on the size of the
MPC.

macmac · **Reply #1 on:** Apr 19, 2019

A FREE account is required to view all solutions!

Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.

Answer Preview

Only 49% of students answer this correctly