If the marginal propensity to consume (MPC) is 0.75, the value of the spending multiplier is:
a. 0.
b. 1.
c. 4.
d. 5.
QUESTION 2According to the equation of exchange, if M = 200, P = 100, and Q = 10, the V is:
a. 20.
b. 2.
c. 10.
d. 5.
e. 2,000.
QUESTION 3Which of the following offers an example of structural unemployment?
a. The rise in unemployment for stable workers after the development of gasoline-powered automobiles and the resulting long-term decline in horse-and- buggy transportation.
b. The rise in unemployment among farm workers after harvest.
c. The unemployment associated with workers changing jobs.
d. The increase in unemployment during recessions.
QUESTION 4If the marginal propensity to consume (MPC) is 0.80, the value of the spending multiplier is:
a. 2.
b. 5.
c. 8.
d. 10.
QUESTION 5The equation of exchange states:
a. MV = PQ.
b. MP = VQ.
c. MP = V/Q.
d. V = M/PQ.
QUESTION 6Althea, a brilliant new Ph.D. in economics, has turned down many job offers because she hopes eventually to teach at one of the top 10 universities in her field. The type of unemployment she is experiencing is:
a. frictional.
b. structural.
c. seasonal.
d. cyclical.
e. underemployment.
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