If the marginal propensity to consume (MPC) is 0.75, a 50 decrease in government spending, other ...

If the marginal propensity to consume (MPC) is 0.75, a 50 decrease in government spending, other things being equal, would cause equilibrium real GDP to:
 a. increase by 50.
  b. decrease by 50.
  c. increase by 200.
  d. decrease by 200.

QUESTION 2

If the money supply is 250 billion and nominal GDP is 1 trillion, the velocity of money is:
 a. 0.25.
  b. 0.40.
  c. 2.50.
  d. 4.00.

QUESTION 3

Sam is a musician who is out of work because electronic equipment replaced live musicians. This is an example of:
 a. frictional unemployment.
  b. cyclical unemployment.
  c. structural unemployment.
  d. involuntary unemployment.

QUESTION 4

The spending multiplier is defined as:
 a. the ratio of the change in equilibrium real GDP to the initial change in spending.
  b. the change in initial spending divided by the change in personal income.
  c. 1 / (marginal propensity to consume).
  d. 1 / (1  marginal propensity to save).

QUESTION 5

Suppose nominal GDP equaled 10,988 billion while the M2 money supply was 6,063 billion. What was the velocity of the M2 money stock?
 a. 0.45
  b. 0.55
  c. 1.81
  d. 2.36

QUESTION 6

Unemployment that is caused by a mismatch of the demand for workers with certain skills and the skills of unemployed workers is:
 a. frictional unemployment.
  b. structural unemployment.
  c. cyclical unemployment.
  d. mismatch unemployment.