If the marginal propensity to consume is .8, what is the multiplier of fiscal stimulus?

Question 1 options:

0.8

8

0.5

5

2.

All else held equal, during an economic expansion the marginal propensity to consume will be:

Question 2 options:

no way to tell

the same

higher

lower

3.

What is private investment (firms buying capital goods) dependent on?

Question 3 options:

Expectations of future profit

Current levels of output

Current multiplier effects

Current government spending

4.

The fact that what is true for one part of the economy is not true of the whole economy is known as the:

Question 4 options:

monetary policy

fallacy of composition

Zeno's paradox

fiscal stimulus

5.

Suppose a government tries to improve its budgetary position in a recession by cutting its spending (austerity policy). According to the textbook analysis, this will likely:

Question 5 options:

amplify the recession

dampen the recession

there is no way of knowing

have no effect on the recession

6.

A situation where the rate of inflation is falling is called:

Question 6 options:

disinflation

deflation

stagflation

hyperinflation

7.

If owner's power rises relative to consumers, this will mean they:

Question 7 options:

lower prices and therefore cause deflation

raise prices and therefore cause inflation

raise prices and therefore cause deflation

lower prices and therefore cause inflation

8.

The Phillip's Curve highlights the tradeoff between:

Question 8 options:

Output and Inflation

Unemployment and Interest Rates

Interest Rates and Inflation

Unemployment and Inflation

9.

If people expect higher inflation this will lead to:

Question 9 options:

there is no way to tell

no change

higher inflation

lower inflation

10.

Interest rates affect (select multiple):

Question 10 options:

The level of inflation

Asset Prices

Exchange Rates

None of the above