1.If MPC equals 0.9, what is the spending multiplier?

a. 9

b. 10

c. 0

d. 9

e. 10.

2.Increases in output and decreases in unemployment are commonly associated with which phase of the business cycle?

a. Expansion

b. Troughs

c. Stagflation

d. Depression.

e. Recession.

3.An increase in energy costs will most likely cause the price level and real gross domestic product to change in which of the following ways?

a. Price level increases and real GDP increases

b. Price level increases and real GDP decreases

c. Price level increases and no change in real GDP

d. Price level decreases and real GDP increases

e. Price level decreases and real GDP decreases