Assume a closed economy with fixed taxes and the marginal propensity to consume is equal to 0.9. What is the government spending multiplier?

Suppose the absolute value of the price elasticity of demand for meals at Fortune Buffet House is ?. What happens to sales revenue if the restaurant increases its price by 5 percent?

A) Sales revenue falls by 100 percent. B) Sales revenue falls by less than 5 percent. C) Sales revenue remains unchanged. D) It cannot be determined without information on prices.

Real interest rates are difficult to measure because

A) data on them are not available in a timely manner. B) real interest rates depend on the hard-to-determine expected inflation rate. C) they fluctuate too often to be accurate. D) they cannot be controlled by the Fed.