QUESTION 1

New government purchases of+500causes cumulative spending in the economy to increase by+5000.So MPC=

1. .9
2. .8
3. .75
4. .6

5 points

QUESTION 2

New government purchases of+200causes cumulative spending in the economy to increase by+1000.So MPS=

1. .1
2. .2
3. .25
4. .4

5 points

QUESTION 3

New transfers of+300causes cumulative spending in the economy to increase by+450.So MPC=

1. .9
2. .8
3. .75
4. .6

5 points

QUESTION 4

The multiplier effect describes the spread of:

1. disease
2. knowledge
3. rumors
4. spending

5 points

QUESTION 5

Rank from large to small:

1. excess, drag, gap
2. excess, gap, drag
3. drag, gap, excess
4. gap, drag, excess

5 points

QUESTION 6