Mathematically, the value of the spending multiplier in terms of the marginal propensity to consume ...

Mathematically, the value of the spending multiplier in terms of the marginal propensity to consume (MPC) is given by the formula:
a. MPC 1.
b. (MPC 1) / MPC.
c. 1 / MPC.
d. 1 / (1 MPC).

QUESTION 2

The velocity of money is the:
a. rate at which the price index for consumer goods rises.
b. multiple by which an increase in government expenditures will cause output to expand.
c. average number of times a dollar is used to buy goods and services included in GDP.
d. number of times a dollar is taken out of the country during a year.

QUESTION 3

An example of structural unemployment is a(n):
a. textile worker who quits one job and waits for the new job to begin.
b. engineer permanently laid off due to advances in technology.
c. computer programmer who becomes rich and leaves the labor force.
d. All of these.

QUESTION 4

When households' marginal propensity to consume (MPC) increases, the size of the spending multiplier:
a. also increases.
b. decreases.
c. remains unchanged.
d. reacts unpredictably.

QUESTION 5

The velocity of money is:
a. money supply divided by prices.
b. spending divided by output.
c. required monetary reserves divided by income.
d. GDP divided by the money supply.

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Mathematically, the value of the spending multiplier in terms of the marginal propensity to consume ...

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