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.When output is below the full employment rate and unemployment is rising, this is the correct monetary policy use of open market operations.

a. Buying securities.

b. Selling securities.

c. Raising the discount rate.

d. Increasing the international value of the dollar.

e. Decrease the reserve ratio.